Bill to Establish Independent Kentucky Gaming Commission Passes House

In a vote late Thursday night, the Kentucky General Assembly passed a bill to establish an independent Kentucky Horse Racing and Gaming Corporation, according to a press release from Senate Majority Floor Leader Damon Thayer (R-Georgetown), the primary sponsor of the legislation.

Senate Bill (SB) 299 revises Thayer's original proposal to attach the commission to the Kentucky Department of Agriculture administratively. The legislative effort was revised following further conversations with stakeholders and House Speaker David Osborne (R-Prospect), which would now establish an independent Kentucky Horse Racing and Gaming Corporation.

In his support of the bill, Osborne drew comparisons to the Kentucky Lottery Corporation and the Public Service Commission. A Senate Committee Substitute was adopted to outline the corporation's formation and set forth a robust framework for its operations. Subsequently, the Senate committee approved SB 299 on Tuesday and with passage in the House was delivered to the Governor on Wednesday.

Currently, the Kentucky Horse Racing Commission oversees all aspects of horse racing in the state, including venues housing historic horse racing (HHR) machines. SB 299 seeks to create the Kentucky Horse Racing and Gaming Corporation as an independent entity that regulates horse racing, sports wagering and charitable gaming in the commonwealth, effective July of this year.

“Things have changed here a lot over the last several years,” Thayer said. “The Horse Racing Commission oversees not only live racing, simulcasting and the ADWs, but also HHR and sports betting. We just think that a higher level of scrutiny and more independence will lead to more integrity on the regulation of all three forms of legalized wagering in Kentucky, pari-mutuel, sports betting and charitable gaming. Initially, I went public with my idea a few weeks ago to attach the racing commission, for administrative purposes only, to the Agriculture Department. That was really just a way to get it out in the public domain and the speaker called me to his office and said he wanted to super-size this idea and he told me what his idea was, an independent agency, still appointed by the governor, but with membership confirmed by the Senate. That Senate confirmation step is a really big deal because when the Senate has to confirm a gubernatorial nominee there is a lot more scrutiny on their background.

Under SB 299, the existing racing commission members would transition to become the initial board of the newly formed corporation, serving two-year terms. Future board members would continue to be appointed by the governor but would require approval from the Kentucky Senate and oversight from the Executive Branch Ethics Commission.

The bill must still be signed by Kentucky Governor Andy Beshear.

“I like to think he's for good governance and I think this is an example of good governance and regulation of our signature industry,” Thayer said.

The bill will also allocate money towards aftercare and toward a program designed to prepare individuals for careers in the racing and breeding industries.

“We have added a perpetual funding source from HHR proceeds to put $250,000 a year toward aftercare in Kentucky,” Thayer said. “Then there is another program called Kentucky Equine Management Internship, which is a work force development program in Kentucky. I put $250,000 in there to support their efforts. We have work force issues across the spectrum. This is a really good program that helps create farm managers, broodmare managers and all sorts of jobs across the spectrum.”