FRANKFORT, Ky. (AP) - A proposal to legalize slots at horse tracks ran out of luck Monday in the Kentucky legislature.
The Senate Appropriations and Revenue Committee voted 10-5 to reject legislation that would have created a financial windfall designed to help Kentucky's struggling horse racing industry compete on a national level.
The outcome was no surprise on the Republican-dominated committee. Its chairman, Sen. Charlie Borders of Grayson, had predicted its demise earlier in the day.
House lawmakers voted Friday to approve the measure that would allow Kentucky's tracks to install "video lottery terminals" that would offer casino-style games like slots. The proposal has been touted as a means to bolster the state's horse racing industry amid fierce competition with other racing states.
The Senate favors a proposal that would generate more money by placing a surcharge on lottery ticket sales.
Gov. Steve Beshear called lawmakers into a special session last week to address a projected $1 billion budget deficit. He later added the gambling issue to the agenda, saying it could generate some $300 million for the state though taxes and fees.
Beshear had warned that without the measure, Kentucky would be at risk of having to surrender its title of Horse Capitol of the World. After it failed, he called for lawmakers to come together on remaining issues, including balancing the budget and creating incentives for business development.
He said in a statement that lawmakers can "adopt legislation that will create thousands of jobs and stimulate hundreds of millions of dollars in investment for our commonwealth."
House Speaker Greg Stumbo said the gambling issue isn't likely to resurface in the remainder of the special session.
State leaders have debated for years whether Kentucky, a state with a long tradition of betting on horse races, can offer casino-style gambling at the tracks. Opponents argue that the state constitution specifically forbids casino-style gambling. Proponents contend a constitutional amendment that allowed a state lottery opened the door.
The American Gaming Association lists 12 other horse racing states - including neighboring West Virginia and Indiana - that allow bettors to use video gambling machines, slot machines or other casino-style games at the track.
Proponents of the legislation had warned earlier Monday that a similar initiative appears to be gaining strength in neighboring Ohio, which, they said, added to the urgency to pass it in Kentucky. Ohio Gov. Ted Strickland said Friday he proposed putting slot machines at seven horse tracks to help balance the state budget.
Strickland, a Democrat, said Ohio faces a $3.2 billion budget deficit that could lead to painful cuts in government services unless more revenue can be generated.
Turfway Park President Robert N. Elliston contends that if Ohio approves the plan and Kentucky doesn't, his track in the northern part of the state will likely be forced out of business.
Ron Geary, owner of Ellis Park race track in western Kentucky, said he expects the push for slots to continue as long as necessary.
"We're very disappointed that it didn't get a chance to go to the full Senate and finally find out once and for all what the full Senate thinks about it," he said, adding that the thoroughbred industry is in crisis.
"We see what 12 other states around us are doing, and we just want to do what they're doing," he said.
Senate President David Williams, R-Burkesville, said a plan to bolster the horse industry with a tax on lottery ticket sales remains in play. Williams said the plan would make Kentucky's purses "the richest in the nation" and increase financial incentives for horse breeders.
"We're not like other states," he said. "We don't have to go with this cheapened diminished form of gambling on the locations of the race tracks to have a vibrant racing industry."
Associated Press writer Joe Biesk contributed to this report.
The legislation is House Bill 2.
(Copyright 2009 by The Associated Press. All Rights Reserved.)