Lexington, KY - Lexington is referred to as the Horse Capital of the World, "but when that is said it really means we are the 'Horse Jobs Capital of the World'," Keeneland President Nick Nicholson told the April meeting of the Lexington Forum. Without major changes, he said, those jobs could wither away.
Nicholson told those assembled at his track the day before the start of Keeneland's Spring Meet that a measure to allow for video slot machines, or what the industry dubs "Video Lottery Terminals," is needed to keep Keeneland, the state's other tracks and the industry as a whole in the commonwealth competitive.
"If it was a battle fought on the tracks, we'd win it," Nicholson said, but Kentucky doesn't subsidize its purses with expanded gaming as 11 of the 12 horse racing states in the region do. "The states that will supplement their purses" will make "irrelevant" tracks the places with the top purses, he said, pointing to Philadelphia Park. In 2000, Philadelphia Park saw annual purses totaling close to $30 million (below Churchill Downs and nine spots above Keeneland in the parks with the top 20 purses), but since Pennsylvania allowed expanded gaming in 2004, it has climbed from its rank as the 10th largest track in the country for purses in 2000 to almost $50 million in 2007, making it second only to Belmont. Should trends continue, Nicholson said, Philadelphia will be first by a mile in 2013 with more than $80 million in purses, while Churchill would hover under the $40 million mark and Keeneland would be out of the top 20.
And that means more than lower quality races at Keeneland and Churchill, Nicholson said, as the horse industry has a total economic impact of $3.5 billion in Kentucky and employs 96,000. A total of 194,000 Kentuckians are involved as horse owners, employees and volunteers. "It permeates much of our culture in Kentucky, all the way from county fairs to the Kentucky Derby," Nicholson said, adding that $758 million of the economy comes from showing horses.
The horse industry is backing a proposal introduced by Kentucky Speaker of the House Greg Stumbo (D-Prestonsburg) that would allow for the video slots at each of the state's licensed race tracks. The machines would all be tied to a central computer housed at the state lottery headquarters, Nicholson said.
While the proposal "wouldn't geographically expand gambling," Nicholson said, because the machines would all be at horse tracks, he said a plan is in place to create a partnership between Keeneland and the Red Mile to have only one expanded gaming facility in Lexington rather than have the two compete against each other beyond what they currently do.
While Keeneland will be the managing partner on the collaboration between the Thoroughbred and standardbred/quarter horse tracks, Nicholson said there would not be an expanded gaming facility located at Keeneland. One possibility, he said, would be to relocate the Red Mile track and build a new facility there to bring it closer to an interstate, which is standard operating procedure outside of the Vegas Strip and Atlantic City.
Stumbo's plan of expanding the menu of gaming options in the state, but limiting it to the video slots and no other types of casino games, would bring in an estimated $700 million to $1 billion annually, with a third of the gross being shipped to Frankfort in the form of taxes, Nicholson said. To help stimulate the horse industry and keep purses in Kentucky on level ground with nearby states, 15 percent of the taxed money is earmarked for the industry for purses, track improvements and breeder incentive funds.
Nicholson said the plan wouldn't put the public at risk because the individual operators would have to construct their facilities, which he said would be the single largest investment made by Keeneland in its history. While the legislation didn't win approval during the 2009 30-day session of the general assembly, Nicholson hopes Gov. Steve Beshear will call the legislators back this summer to focus on the matter.
Nicholson specifically cited June as the period in which he thought Beshear would call the legislature back to Frankfort, but Beshear spokeswoman Jill Midkiff said no plans have been set.
"It would be premature to say exactly if he would call a special session when it would be and what would be on the call until we know what kind of revenue shortfall we're going to be experiencing in the next budget year," Midkiff said.
The next Lexington Forum meeting will be held at 7:30, May 7, at Annette's City CafĂ.