Bettor-Friendly Legislation Passes Kentucky Senate

By a vote of 33-1, the Kentucky State Senate has given their stamp of approval to Kentucky House Bill 607, which modernizes the taxation of pari-mutuel wagers and, in a major victory for horseplayers, eliminates the dime breakage than has been the standard for many years in favor of penny breakage. The change in the breakage will put more money into the pockets of horseplayers and is the first such measure to be introduced in the United States. The lone dissenting vote came from Republican Senator Whitney Westerfield.

“For more than a century, horseplayers have never received a full winning dividend and today the General Assembly in Kentucky affirmed that it is beyond time to change that and respect horseplayers anywhere betting on races from Kentucky,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF), which has championed the cause dating back nearly four years.

“Across just the last three decades or so, approximately $1 billion has been retained from winning bets across America. The passage of HB 607 will put some of this money back in the pockets and accounts of winning bettors from future bets.'

“We are thankful for the leadership of bill's House sponsors, Representatives Adam Koenig and Al Gentry, and Senator Damon Thayer in guiding its passage.

In addition to the favorable breakage rules, HB 607 calls for taxation on pari-mutuel wagers at 1.5%, the same rate assessed on Historical Horse Racing (HHR) machines. The standardization of taxation means that bets made through and ADW by Kentucky residents will be taxed at 1.5%, up from 0.5 %.

“Horse racing must relentlessly pursue every method to make its product as competitive as possible,” said Bernick. “The market pressure on racing is stronger than ever with the rapid legalization of sports betting across the country. We hope that operators realize the importance of retaining all customers and driving their participation through the presentation of competitive racing with competitive pricing.”

HB 607 was sponsored by Representative Adam Koenig. A house committee approved the legislation Mar. 16 before referring it to the Senate for its consideration. The bill now returns to the House for concurrence, but it is expected to sail through and head to the desk of Governor Andy Beshear for his signature.

The Kentucky Equine Education Project (KEEP) released a statement Tuesday, applauding the General Assembly for the passage of HB 607.

“A tremendous amount of work went into crafting this new tax policy and KEEP is grateful to the legislators who served on the Pari-Mutuel Wagering Taxation Task Force for the time and effort they put into fully understanding the economic structure of Kentucky's horse industry,” the statement read. “We would also like to applaud Senate Majority Floor Leader Thayer and Representative Koenig for their leaderships as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing revenue for the state, while at the same time not arbitrarily raising tax rates in a way that would damage the economic success of the industry.

“The entire horse industry was engaged in this process and KEEP was proud to work closely with legislators to ensure that they had access to the full picture of what economic benefits the industry has on the Commonwealth.

“KEEP will continue working on behalf of Kentucky's entire horse industry and community to advocate for policies that benefit everyone within the industry's economic ecosystem. Growing the success of the industry's more than 60,000 jobs and $6.5 billion economic impact on the state benefits all Kentuckians.”

Once signed off on by Beshear, the provisions of the bill are due to take effect come August.

The post Bettor-Friendly Legislation Passes Kentucky Senate appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Sports Betting Bill Advances in Kentucky

House Bill 606, which would legalize sports betting in Kentucky, passed by a margin of 58 to 30 Friday in the Kentucky House and will now be sent to the Senate.

The bill will also legalize fantasy sports and on-line poker. The revenue will be used to support the state pension fund.
The bill was sponsored by Rep. Adam Koenig (R-Erlanger), a longtime supporter of sports betting in the Blue Grass State. Koening estimates that sports betting will generate at least $22.5 million in new state tax revenue each year. It marks a third year that a sports wagering bill has come out of committee, but it has stalled each time. But with the 58-30 vote along bipartisan lines in the House, there are renewed hopes that sports betting will be legalized this time around.

Koenig said Friday that the bill would bring “activities that go on in every corner of this state out of the darkness and into the light.”

“The fact is, we've been betting on sports in America since they invented sports,” he added.

So far as its chances of passing the Senate, the Majority Floor Leader, Senator Damon Thayer, is on record supporting sports betting.

“With the passage of HB 606 in the House of Representatives, the sports betting issue moves to the Senate,” Thayer told the TDN in a text. “We will be reviewing the bill and assessing its chances in our chamber. I am a firm supporter of sports betting and hope enough of my fellow members join me in supporting the measure so that we can join most of America in allowing it to occur.”

The main opposition to the bill comes from religious organizations and their supporters among Kentucky lawmakers.

David Walls, the executive director of the Family Foundation, told wdrb.com that sports betting was an example of “bad government and bad policy.”

“This type of predatory gambling is designed to prey on human weakness, with the government colluding with the gambling industry to exploit our fellow Kentuckians,” Walls said.

The 2022 session of the Kentucky General Assembly ends Apr. 14, meaning the Senate will have to act quickly. If the bill passes the senate and is signed by Governor Andy Beshear, it is estimated that sports betting could be up and running in the state by mid-summer. Beshear has come out in support of sports betting.

The bill allows the state's racetracks to partner with mobile sports betting operators like DraftKings and FanDuel. Online betting will be available throughout the state. The tracks will also be allowed offer sports wagering as their main location, simulcasting facilities and at their venues hosting Historical Horse Racing machines. Those will be the only brick-and-mortar facilities permitted to conduct sports betting. Patrons will have to go the tracks or their affiliated locations to sign up for an account.

Horse racing purses will not get a cut from sports betting, but its legalization and the fact that it will take place out of the state's racetracks could help introduce sports bettors to racing.

Sports betting will regulated by the Kentucky Horse Racing Commission.

The post Sports Betting Bill Advances in Kentucky appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

HHR Passes Ky House 55-38 After Emotional Debate

The bill to legalize historical horse race (HHR) gaming in Kentucky by defining “pari-mutuel wagering” to include previously run races passed in the House of Representatives by a 55-38 vote shortly after 8 p.m. Thursday, with seven legislators not casting votes.

Capping an emotional and contentious—but always civil—floor debate that stretched over three hours Feb. 11, the most controversial bill of the 2021 Kentucky legislative session now heads to Governor Andy Beshear, who has previously indicated support for keeping HHR intact in Kentucky.

The passage of SB 120 this week by both the Senate and House clears the way for the continued operation of the 3,625 HHR machines at six licensed venues so they can keep generating $2.2. billion in annual handle. The Kentucky Thoroughbred Development Fund's purse-money cut from HHR is three-quarters of 1% of that handle.

But even as the issue was being debated, some legislators expressed a certainty while speaking from the House floor that the pending HHR law was sure to be litigated in the courts, continuing a 10-year legal odyssey in the state over whether the slot machine-like gambling machines are legal under the state's constitution.

Other representatives vowed to pursue changes to state law to make HHR's continued operation more profitable for the state by filing legislation that would raise Kentucky's tax on HHR higher than the current 1.5% of the handle.

Proponents hit repeatedly on the need to preserve one of Kentucky's signature industries, and painted dire pictures of what would happen to constituents if the Thoroughbred industry and all of its ancillary industries and small businesses were allowed to slip off the grid by taking away HHR, which has been operating under questionable legal status since 2012.

Opponents of SB 120 presented wide-ranging arguments against enabling HHR to continue. Among them were religious convictions against gambling, broadsides against corporate greed (that legislators aimed at HHR licensees), the interpretation that the Kentucky constitution forbids HHR, the fact that litigation is ongoing over HHR and thus should not be voted upon, and a moral emphasis on “the rule of law” versus “too big to fail.”

Rep. Matthew Koch (R-Paris) set the pro-bill tone early in the debate by asking fellow legislators to envision a debilitated Kentucky in which breeders, owners, and the tracks would vacate the state in droves if HHR were allowed to vanish.

“Let me remind you that while Kentucky is the best place to raise a horse, it is not the only place that you can raise a horse,” Koch said. “And we have to fight to keep that here. “[If] we've got no horses, you have no barns. You have no fences, no hay, no straw. No blacksmiths, no veterinarians, no equine transportation. No trainers. No tourism dollars. And when you don't have any of that, you don't have any sales tax on it, either. That's less tax revenue for Kentucky.

“And I can't imagine a more dangerous time to cripple our industry,' Koch continued. “I cannot imagine sitting here today and voting to put Kentucky families on unemployment. Not now. This bill is about fighting for jobs in our signature industry.

“And I'm going to end this with two questions,” Koch summed up. “What would anyone in this body do, and how hard would we fight, to bring an industry [to] this state right now that was bringing several thousand jobs with it? And I think we all know the answer for that.”

Opponents didn't buy that line of reasoning. David Hale (R-Wellington), who is recovering from lingering effects of COVID-19, said he had someone drive him in an ice storm to Frankfort on Thursday just to take an impassioned speech against allowing HHR to operate, even if it's the last speech he ever makes on the House floor. After another legislator described Kentucky's tracks as having acted in “good faith” regarding HHR while the legality of the machines was being litigated, Hale let forth with the following bit of bombast:

“Would somebody please give me a break?” Hale railed. “Doing this in good faith? When over and over and over they were told that you're doing something that's illegal? Time after time, year after year, the courts kept telling them you're…operating something that is not legal under the law, you must cease. And they snubbed their nose at it again time after time—and now they're in trouble financially.”

HHR was put into its deepest peril on Jan. 21, when the Kentucky Supreme Court denied a petition for rehearing an earlier 7-0 judgment that called into question the legality of HHR because it didn't amount to “pari-mutuel wagering.”

SB 120 was designed to make HHR compliant with that Supreme Court ruling by defining “pari-mutuel” for the first time within state statutes. The proposed fix was achieved by including “previously run” races within the definition. Kentucky's constitution only allows for pari-mutuel betting, the state-run lottery, and charitable gaming.

That measure passed the Senate 22-15 on Feb. 9, and on Thursday, the House began its 2 p.m. session by voting in a series of unrelated bills that had little or no opposition. Prior to the highly anticipated vote on SB 120 however, the House went into an unexpected recess that lasted well over an hour.

As the delay stretched to the 5 p.m. mark, speculation began to mount on social media that Republican leaders were calling upon individual members to ascertain that the House had enough votes to favorably carry the HHR measure, which had been considered an iffy proposition in that chamber.

When the session resumed around 5 p.m., the House first detoured to take up HB 226, whose title pertains to charitable gaming. The key points of the measure would 1) Triple the excise tax on advance deposit wagering (ADW) from 0.5 to 1.5%, and 2) Put the Kentucky Horse Racing Commission under executive branch ethics rules, a move that Kentucky transparency advocates have called for in previous legislative sessions.

House Speaker David Osborne (R-Prospect) explained how the ADW taxation in reality pertained more germanely to SB 120. But because Kentucky stipulates that any revenue-related measures have to originate in the House and not the Senate, those issues were taken up in HB 226. Osborne said the increased tax would generate approximately $6 million in revenue for Kentucky.

But Osborne also added that the purpose of hitting the tracks with a higher tax also served as a “motivating factor.” Although he did not explain what he meant by that term, presumably he was referring to a way to politically incentivize revenue-conscious, on-the-fence House members to vote in favor of SB 120.

HB 226 then passed 73-15, advancing to the Senate for consideration.

When debate on SB 120 finally began, Rep. Adam Koenig (R-Erlanger), continued on the theme of the legislature needing to clarify and adjust the confusing system of taxes related to horse race betting by pointing out that a task force is slated to be created next week to more fully explore the tax structure on HHR.

Koenig then continued Koch's line of reasoning (outlined above) about how legislators needed to look beyond the immediate perils of not voting for HHR, urging fellow representatives to think about the bigger picture.

“It's easy to point to the direct jobs and the direct money,” Koenig said. “But there's so many other jobs that come from this. But if you don't have [a racing industry] left to tax, you lose it all. And some of it will be immediate, and the rest will come slowly. But we will see it reflected in our budgets. We will see it reflected on the farms.”

Opponents however, continued to chip away at what they believed was the unconstitutionality of letting HHR operate.

Rep. James Tipton (R-Taylorsville) asked if bill was written to conform to the way HHR is being conducted or if was written to conform to the Supreme Court's ruling on what constituted pari-mutuel wagering.

“I'm going to make one prediction: Should this legislation pass, there will be litigation,” Tipton said.

Rep. Jennifer Decker (R-Waddy) said that defining pari-mutuel in a way that the Supreme Court has already defined as being illegal is “hard to take in a nation built on the rule of law.”

Decker recited an old Abe Lincoln anecdote to underscore her point about how you can't change reality simply by redefining it. She said Lincoln once asked rhetorically, “How many legs does a dog have if you call a tail a leg? Four. Because calling a tail a leg does not make it a leg.”

Several amendments were proposed on the floor. A couple got shot down for constitutional reasons. One that came up for a vote but failed, 49-36, would have attached a new level of transparency to the bill by mandating “that communication between the racing commission and licensees shall not be considered confidential and shall be subject to” Kentucky open records laws.

Several legislators, including Rep. Mary Lou Marzian (D-Louisville), whose district includes Churchill Downs, said that she wants to hold the tracks to their word that they are “committed” to making tax changes to HHR.

INDUSTRY STATEMENTS FOR PASSING LEGISLATION TO SAVE HHR:

KEEP
The Kentucky Equine Education Project (KEEP), Kentucky's equine economic advocate, released the following statement today following the Senate's passage of Senate Bill 120:

“Thank you to our representatives in the House for acting in Kentuckians' best interests and passing critical legislation to keep historical horse racing in the commonwealth. This is great news for the 1,400 people employed directly by historical horse racing and the tens of thousands more who rely on the horse industry to provide for their families.

“The Supreme Court's ruling on HHR last year brought major uncertainty to our employees, local businesses, communities and our industry as a whole. We applaud the General Assembly for acting swiftly to maintain the status quo of historical horse racing that the Kentucky has known for the last 10 years. With the passage of SB 120, we are confident about the future of Kentucky racing and our ability to continue bringing new jobs and economic growth to our communities across the commonwealth.

“Gov. Beshear has been vocal in his support of historical horse racing and its positive impacts on our state, and we look forward to seeing SB 120 signed into law.”

KENTUCKY TRACKS: CHURCHILL DOWNS, KEENELAND, ELLIS, RED MILE, KENTUCKY DOWNS
“On behalf of our team members, our horsemen and all of the citizens of the Commonwealth who earn their pay checks directly or indirectly from the horse industry, we applaud the Kentucky House of Representatives for the passage today of SB 120. The future of the Commonwealth's signature industry and those who support it is secure. We had extensive discussions with Governor Beshear and given his longstanding and unwavering support of the horse industry, we anticipate that he will sign SB 120 into law.

“We express our profound gratitude to bill sponsor Senator Schickel, President Stivers and Minority Leader McGarvey of the Kentucky Senate and Speaker Osbourne and Minority Leader Jenkins of the Kentucky House of Representatives for their leadership in securing SB 120's passage in the General Assembly.

“On behalf of the Commonwealth's race tracks, we also confirm and reiterate our discussions with Governor Beshear, Minority Leader McGarvey and Minority Leader Jenkins that we will work constructively to revise and raise the tax structure on historical racing machines, including consideration of a fair and equitable graduated tax structure. We look forward to those discussions in the near term and confirm our commitment to the Commonwealth to build on our tax and job base through sound capital investments and good corporate citizenship.”

J DAVID RICHARDSON, BILL LANDES, DELL HANCOCK, DOUG HENDRICKSON, BRAXTON LYNCH, POPE MCLEAN JR. & BEN HUFFMAN
“We commend the tireless effort and professionalism of the KTA-KTOB's Director, Chauncey Morris, in helping secure the passage of Historical Horse through racing remediation in both the Kentucky State Senate and the Kentucky House of Representatives. Chauncey has worked effectively in mobilizing his Board members to work with other industry representatives to educate about the vital importance of HHR. We look forward to his continued service in the years to come.”

CHURCHILL DOWNS INC. CEO BILL CARSTANJEN
“I commend the House for their action today that keeps historical horse racing in Kentucky, preserves the strength of our state's signature industry and protects thousands of jobs that are dependent upon it. With the passage of Senate Bill 120 in the Senate and now the House, our legislators have made clear their support of historical horse racing in the Commonwealth.

“I wish to personally thank Governor Beshear for his unwavering support of the horse industry and the leadership of bill sponsor Senator Schickel, President Stivers, Majority Leader Thayer and Minority Leader McGarvey, of the Kentucky Senate as well as Speaker Osbourne and Minority Leader Jenkins of the Kentucky House of Representatives in securing SB 120's passage in the General Assembly today. We, of course, look forward to Governor Beshear's signage of SB 120, which he has stated publicly he will do.

“Tens of thousands of Kentuckians have contributed to the growth and success of our racing circuit and equine industry. I am thankful not only for the important work they do each day to keep our industry moving forward, but for taking the time to reach out to their legislators on this critical issue. Your voices truly made a difference in the effort to keep HHR in Kentucky.

“Following discussions today with Governor Beshear, Minority Leader McGarvey and Minority Leader Jenkins, I reiterate our commitment to working constructively to revise and raise the tax structure on historical racing machines, including consideration of a fair and equitable graduated tax structure. Additionally, I reaffirm our commitment, upon SB 120 becoming law, to immediately reengage on our capital investment project planning in Kentucky which, in turn, when implemented will create millions of dollars in economic impact and hundreds of construction and permanent jobs in the Commonwealth.

“I look forward to moving on from the uncertainty our industry has faced over the past several months and to our continued investment in the Commonwealth of Kentucky.”

KENTUCKY HORSEMEN'S BENEVOLENT & PROTECTIVE ASSOCIATION
“Horsemen across Kentucky, and those across the nation who race in the Commonwealth, should be so proud of the Republican and Democratic leadership in the Kentucky House for shepherding passage of SB 120. As Rep. Adam Koenig and others so eloquently expressed, Sen. John Schickel's bill is imperative to securing the future for a signature Kentucky industry and the tens of thousands of jobs and billions of dollars it preserves and creates in economic development, agribusiness and tourism for our state.

With this clarification of what constitutes parimutuel wagering and resulting protection for Historical Horse Racing, Kentucky racing can continue its upward trajectory as America's premier racing circuit–and thanks to SB 120 we will have a strong year-round circuit. Passage of this bill not only protects the livelihoods of countless Kentuckians, but also avoids what would be a devastating loss in business to the thousands of small business owners and vendors who directly and indirectly benefit from the horse and racing industries.”

 

The post HHR Passes Ky House 55-38 After Emotional Debate appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

‘It’s Not Just The Big Guys’: Historical Horse Racing Supports Small Kentucky Tracks, Horsemen

As both the Kentucky State Senate and Kentucky House Committee for Licensing, Occupations and Administration Regulations passed SB 120 this week, Turfway Park horsemen are making their case for the importance of protecting Historical Horse Racing. They say protecting HHR, as it is known, is critical to saving Kentucky jobs, including their own.

HHR's future in Kentucky is uncertain following an opinion issued by the Kentucky Supreme Court in September. At risk is a significant revenue stream that has produced some of the best racing purses in the country, prompted track owners to make considerable facility investments and bolstered a year-round racing circuit on which Kentucky horsemen have come to depend.

Trainer Buff Bradley, a Kentucky native, left the state 11 years ago to winter in Florida and then New Orleans because purses had gotten so bad at Turfway Park. After purses increased last year, he convinced owners to stick around Kentucky.

“I was hoping Kentucky was going to be a stronger circuit, with Ellis doing well,” said Bradley. “It really looked like Turfway was going to be on the rise with Churchill buying it and purses increasing. Now I'm rethinking, 'Uh oh. I came here and it might have been too soon,' because things aren't looking as well with Historic Horse Racing machines maybe not going through. That's going to be the big question.

“Kentucky can be a great circuit,” he said. “I know last year everybody was thrilled. You've got owners who see a rising Kentucky, even with Ellis Park and Turfway's purses being better, they can afford to stay around here. And they live here. If they can do that, they're going to go to the sales and buy more horses. If we can keep more horses around here, we can keep everybody busy – more jobs. There's a lot to it.”

Bradley employees 12 people in his 20-horse stable at Turfway.

“The money has made a big difference,” he said. “It's not like we're getting rich off this, but it makes it affordable for people to stay and to meet people to buy horses. It's become a year-round circuit in Kentucky, which is a big plus. Because you keep the people here. This is our home.

“If we don't have HHR, I can see racing really decreasing here in the state. Horse racing will go down to Keeneland and Churchill basically. I can't see how Turfway, Ellis Park – those two tracks for sure – and even Kentucky Downs could survive. We'd probably decrease the number of days even at Keeneland and Churchill. And when that happens, it's tough to get stables to come in because there isn't going to be much racing. They're going to go to New York and Florida, areas where they have racing throughout the year.”

Groom Toni Ouzts, who has two children with her husband, veteran jockey Perry Ouzts, is concerned that if the Kentucky House does not pass the HHR bill, life will be more difficult for them.

“I need this job,” she said. “It's my livelihood. It's my passion. I'd be lost without it. And my husband would be out of work, too, if we would not have Turfway Park.”

Asked about people who would say that HHR just makes rich people richer, she said: “No. This is keeping me in a job. It's keeping my husband in a job, people I work with every day. We work seven days a week. This is more than a job. It's everything. My sister and I work here 'rubbing' horses together. And even her husband works on the front side. It's giving everyone a job.”

When discussing the potential of Turfway likely shutting down unless the HRR bill passes, she said she is surprised that Turfway's existence is even in doubt and it makes her sad.

“It's scary. It really is scary.”

Turfway “gives so many people job,” she said. “So many people would be out of work. Just think of the hay and straw people, the feed man. There's so much involved in horse racing. It's not just the big guys.”

Trainer Jeff Greenhill left a career as chemical engineer in Alabama to go into horse racing. He's been training about 25 years, wintering at Turfway Park throughout.

“This is the place that the little guy survives — here and Ellis Park,” Greenhill said. “There are 1,100 horses here, and I've got 18 and I have eight employees. You can do the math: There are a whole lot of people here employed by the horse-racing industry. Unless purses stay at a reasonable level, I'm out of business or I'm moving to New York, Florida or Indiana.”

Veterinarian John Piehowicz, who has served clients on the local racing circuit since the early 1990s, also sees difficult choices ahead without historic horse racing.

“If SB120 isn't passed then I think this (Turfway Park) is done,” he said.

Piehowicz says racing “is the one industry where trickle-down economics works. If you look around the racetrack here, there are a lot of people who depend on the horses, depend on the income – whether it's a Sunoco station around the corner where half the people who work here go and buy their snacks or the local community. When this place closes it's going impact more than horse racing in the state of Kentucky.”

The post ‘It’s Not Just The Big Guys’: Historical Horse Racing Supports Small Kentucky Tracks, Horsemen appeared first on Horse Racing News | Paulick Report.

Source of original post

Verified by MonsterInsights