Kentucky HHR Bill Passes House Committee, On To House Floor

Senate Bill 120, which would expand Kentucky's definition of parimutuel wagering to include historical horse racing (HHR) machines, unanimously passed the House Committee for Licensing, Occupations and Administration Regulations on Wednesday morning.

The bill passed the state senate Tuesday afternoon on a vote of 22-15.

The house committee heard from a nearly identical group of proponents and opponents to the bill as the Senate Committee on Licensing and Occupations last week. The house committee is chaired by Rep. Adam Koenig (R-District 69), who is also the legislative representative on the Kentucky Equine Drug Research Council, a committee of the Kentucky Horse Racing Commission. The senate committee is chaired by Sen. John Schickel (R-District 11) who is the bill's sponsor and also fielded questions from members of the house committee.

Horseman Tommy Drury provided the committee with his outlook on the way the cash influx from HHR has kept his business afloat, while representatives from The Family Foundation expressed a variety of concerns, framing the bill as a “millionaire's bailout” and citing concerns about the constitutionality of the bill's treatment of parimutuel wagering.

The bill's supporters have repeatedly expressed the reliance of Kentucky's racing industry on the increased purses and breeders' incentives from HHR income, with particular focus on the many jobs supported by that revenue and the secondary industries that rely on racing for business.

There are a few different points of opposition expressed by legislators who spoke against the bill during its senate vote Tuesday; some question the tax structure for HHR income, saying the state does not benefit enough from the income. Others believe a constitutional amendment is the only sure way to make HHR legal because the definition of legal gambling in Kentucky is outlined in the state's constitution. Still others have concerns about the potential for gambling addiction among HHR users, which they say disproportionately impacts poor families.

Early reports have indicated the bill could face more opposition in the house than it did in the senate. The bill may now go to the House floor for a vote, though it's unclear when that will happen. Wednesday begins the thirteenth day of the Kentucky General Assembly regular session, which is limited to 30 days this year.

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Kentucky Legislator Files Bill To Raise Taxes On HHR, ADW, Claims Racing Gets ‘A Sweetheart Deal’

Kentucky State Rep. Kim King (R-Harrodsburg) filed a bill in the state's legislature this week to raise tax rates on advance deposit wagering and historical horse racing handle in Kentucky, according to the Lexington Herald-Leader. After researching the issue, King said the current tax rate on ADW is far less than on live bets.

“I think they've really been getting a sweetheart deal and it needs to be updated,” King said.

King's bill would raise the tax rate on HHR activity from 1.5 percent of average daily handle to 3 percent and the rate on ADW from .5 percent to 3 percent. She believes the proposal could generate as much as $40 million for the state to spend on schools, health care and other projects.

King filed a similar bill last year but it did not get out of committee. Rep. Adam Koenig (R-Erlanger), who is a member of the Kentucky Horse Racing Commission's Equine Drug Research Council, opposes the measure, expressing concern that tax increases would be passed on to the bettor. Koenig is also chair of the House Committee on Licensing, Occupations and Administrative Regulations, where the bill stalled last year.

In 2020, ADW handle in Kentucky was $282 million, of which $1.4 million went to taxes and only $212,093 went to the state's General Fund. HHR handle was $2.2 billion, of which $33.8 million went to taxes and the General Fund received $15.1 million.

Read more at the Lexington Herald-Leader

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KEEP: A Legislative Fix For HHR Is About Keeping The Status Quo, Not Expanding Gaming

The Kentucky Equine Education Project (KEEP), Kentucky's equine economic advocate, released the following statement on the importance of legislation to maintain historical horse racing in Kentucky on Tuesday:

Kentucky's signature equine industry has a simple request for state legislators in 2021: maintain the status quo and protect local jobs and investment by allowing historical horse racing to continue in Kentucky. Inaction would cost us thousands of jobs, millions in tax revenue and significant economic development opportunities at a time when they are needed most. The longer-term impact to Kentucky's world-renowned horse racing industry, including the breeding, farming, training, tourism and other sectors it supports, is of even greater concern.

Historical horse racing is a popular form of entertainment that has been taking place in the commonwealth for a decade, while providing important jobs to Kentuckians, driving local investment and breathing new life into our signature equine industry. Much of this activity has been taking place in smaller communities throughout the commonwealth, where job creation and investment opportunities aren't always abundant.

Historical horse racing has allowed Kentucky's racing circuit to remain competitive with neighboring states by increasing purses and promoting higher quality racing. These benefits extend far beyond the racetrack, as a healthy racing circuit also benefits the vast network of businesses and individuals who work tirelessly in support of the horse industry, including breeders, feed and bedding suppliers, tack and equipment dealers, veterinarians, farm hands, blacksmiths, owners and trainers, among others.

A strong equine industry means a strong Kentucky and that's something we should all support.

Unfortunately, a recent ruling by the Kentucky Supreme Court has put historical horse racing—and our entire industry—in jeopardy. Now, we need the General Assembly to act quickly and address the simple fixes outlined by the court. Legislation will soon be introduced to do just that.

During the last ten years, historical racing has helped our equine industry grow and become the very best version of itself. By taking action to protect the future of historical horse racing, our legislators are protecting critical jobs, state revenue and economic development—all of which greatly benefit their constituents and their communities. Now is not the time to dismantle the vital industries that have continued to generate revenue and sustain jobs in Kentucky during the pandemic. Without historical horse racing, our industry will suffer, as will the people who call Kentucky home.

Our efforts to keep historical horse racing in Kentucky are just that. This is not about expanding gaming or allowing any new form of gaming in the state. It's about maintaining the status quo, protecting businesses that are already and have been operating for years and ensuring that one of our most impactful industries—one synonymous with Kentucky—can continue investing in our communities and moving Kentucky's economy forward.

ABOUT KEEP
The Kentucky Equine Education Project, Kentucky's equine economic advocate, is a not-for-profit grassroots organization created in 2004 to preserve, promote and protect Kentucky's signature multi-breed horse industry. KEEP is committed to ensuring Kentucky remains the horse capital of the world, including educating Kentuckians and elected officials of the importance of the horse industry to the state. KEEP was the driving force in the establishment of the Kentucky Breeders Incentive Fund, which has paid out more than $177 million to Kentucky breeders since its inception in 2006, and pari-mutuel wagering on historical horse racing, which has been responsible for more than $50 million to purses and more than $24 million to the Kentucky Thoroughbred Development Fund.

KEEP works to strengthen the horse economy in Kentucky through our statewide network of citizen advocates. To learn more about how you can become a member or support our work, please visit www.horseswork.com.

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