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Will Kentucky Be the Next State to Add Video Lottery Terminals?

2 min readBy: Alicia Hansen

This week Kentucky legislators considered a bill introduced by House Speaker Greg Stumbo that would allow video slot machines at Kentucky horse racing tracks. The video lottery terminals (VLTs) would be administered by the state lottery agency, and the bill has the support of Kentucky Lottery President Arch Gleason. Also supporting the idea is Kentucky’s horse racing industry, since the implicit taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. revenue brought in by the VLTs, as well as the consumers who would patronize the tracks to play the machines, would help support the racing industry.

From WFPL News:

While the 2009 legislative session is in recess, the House Licensing and Occupations committee is hearing testimony on the bill. Speaking for the horse industry, Keeneland President Nick Nicholson warns Kentucky is rapidly losing ground. He says other states are already subsidizing race purses with revenue from video slot machines.

“They’re outspending us. They’re out-building us. Their purses are higher and they’re creating new jobs for their citizens,” Nicholson said.

Speaker Stumbo says Kentucky must compete or lose its signature horse industry. . . .

Kentucky is not the only state to see the lottery, and VLTs in particular, as a way to save the racing industry, but this is a poor reason to expand the lottery. The lottery is a government monopoly and a source of implicit tax revenue, borne disproportionately by the poor and enacted in a non-transparent, non-neutral manner. As if this were not reason enough to avoid VLTs, Kentucky legislators might face other obstacles:

And since people already gamble at the tracks, Stumbo sees no need for a constitutional amendment on expanded gambling.

. . .

But opponents beg to differ. . . . And when Kentucky voters OK’d a state lottery in 1988, Martin Cothran of Say No To Casinos says the constitutional amendment’s intent was clear.

“Voters were told in reports like the report of the Lottery Commission, released October 31st, 1988, that lottery games included only what are called instant and online games, designations that exclude VLT’s,” Cothran told lawmakers.

Cothran says slot machines at horse tracks also fly in the face of another constitutional protection.

“If we allow VLT’s, but restrict them to tracks under this measure, we’ll run straight into the provision of the constitution that disallows special treatment for particular industries. Which means that a vote for this bill, could be a vote for VLT’s not only at horse tracks, but ultimately anywhere,” he said.

More on state-run lotteries and Kentucky’s tax system.