By Richard Nelson
Commonwealth Policy Center
Last week, the Kentucky Supreme Court rejected the horse racing industry’s appeal to allow historic horse racing, also known as video slot machines, at its six venues across the Commonwealth. As a result, Kentucky state lawmakers are under pressure to change the definition of parimutuel so that video slot machines can be preserved.
Gambling lobbyists are stepping up their efforts by addressing lawmakers with a form letter claiming that Kentucky’s signature industry is at “a major threat”. They deplore the loss of millions of dollars in investment, thousands of jobs, and that in these troubled economic times lawmakers “should do whatever it takes to protect jobs and promote economic growth”.
The risk that the tracks will lose tens of millions in new infrastructure costs is real. This also applies to the prospect of the state losing $ 21 million in tax revenue. But the racecourses should have known better than to place such a reckless bet at all. They advanced their casino-like developments in the middle of a legal battle that challenged their legality a decade ago.
It’s not news that players are playing, but eyebrows were raised when Churchill Downs and Keeneland rolled the multi-million dollar dice and snake eyes appeared. It’s a first for Kentucky’s equine industry which is used to taking hold.
But should we feel bad about Kentucky’s favorite industry, which has bypassed the law and defied the legal process that rightly changes public order? The Oak Grove Track and Gaming facility near my old Trigg County farm touts, “Get ready for the Vegas thrill, minus the flight!” They have 1,300 video slot machines that promise fast action and big jackpots. But has anyone ever asked Christian County residents if they want a Las Vegas-style venue in their backyard?
People never had a say. The legislature never changed the law. Heck, there has never been a legitimate hearing where lawmakers had a chance to hear both sides at the same time. The Kentucky Horse Racing Commission (KHRC) magically found in one of its meetings over a decade ago that it would be okay for you to call slot machines Historic Horse Racing (HHR) and develop new electronic games called Horse Racing (HRM). But it’s not okay. It’s dishonest.
All riders know that you should never get the cart in front of the horse. If you do, bad things will happen. In this case, they played word games and manipulated the legislative process. As a result, Kentucky’s Supreme Court saw through the charade in its unanimous decision last September, and now horse tracks are about to lose millions of their investments. Losses for the rich can be absorbed. This is not the case for Kentucky’s lower socio-economic class.
Government sponsored gambling harms people extensively, especially the poor. They are sold a parts list that promises them a way out of their poverty. But the way to a better life is not about pushing the button and being fascinated by the spinning wheels. The bells and whistles and even an occasional victory tend to lead to more poverty. As much as casino interests talk about jobs and the economy, they certainly do not specialize in altruism and player welfare. They make money by losing.
Perhaps by this point the horse races developed a sense of empathy towards those who lost their money playing video slots. An estimated $ 2 billion wagered on video slots at Kentucky’s six casinos in 2019, and many of the players lost far more than they can afford.
The house never likes to lose, but in this case they haven’t bottomed out like the thousands of Kentuckians who sent them there. Another loser in this lengthy saga of brute force and deception is the people and industries that obey the rules of the public order process. There is an established way to change the law, and it is not through unelected bodies or commissions. We have lawmakers that do that.
This brings us back to the pressure they were under when they convened on February 2nd. It remains to be seen whether the legislature will double as a result of bad arguments and a rescue of an industry that doesn’t need help.
RICHARD NELSON is executive director of the Commonwealth Policy Center.