Louisville Courier Journal
January 12, 2007
Racetrack Slots Bill Has Legs
Legislative tenor gives industry, backers hope.
By Lesley Stedman Weidenbener
INDIANAPOLIS House Speaker Pat Bauer breathed new life into an old proposal to put thousands of slot machines at Indiana racetracks, promising yesterday that the issue will get a committee hearing.
"The horse racing industry is in deep trouble in this state because both tracks appear to be going broke," he said. "We're open to looking at some way of helping them."
Two lawmakers have filed similar bills to authorize the devices. The proposals pledge to use the resulting revenue for larger race purses, local governments, health-care programs, full-day kindergarten and economic development.
They would also mean millions of dollars for the owners of Indiana Downs in Shelbyville and Hoosier Park in Anderson.
Churchill Downs has long been the majority owner of Hoosier Park, but it announced last month that it was selling its shares to its minority partner, Indiana-based Centaur Inc.
Bauer, a South Bend Democrat, said no decision has been made about which bill will be heard.
Both would allow up to 2,500 slot machines at each track. One bill would permit up to 2,500 slot machines at off-track-betting centers in Indianapolis and Fort Wayne. Those OTBs, now owned by Hoosier Park, would become jointly operated by the two tracks.
Indiana Downs' OTB in Clarksville would not get slots under either proposal.
Bauer said he prefers a proposal that limits the slots to just two destinations, but said he'll let the Public Policy Committee work out the details.
"We're glad the legislators are recognizing the importance of the horse racing industry in Indiana," said Mike Brown, spokesman for the Indiana Horse Racing and Breeding Coalition. "We have owners, breeders and trainers in all 92 counties in the state, and we provide significant economic development and more than 4,400 jobs."
The bills could mean as much as $100million annually for the state's declining racing industry, money that would expand breed-development programs and boost purses.
The purses are especially important to breeders because bigger prizes make their operations more profitable. They also attract better horses, which in turn draw more wagering.
"I'm fearful of what will happen (without the bill) because we've heard over the last few years and there's evidence to support this that the horsemen follow where the greatest opportunities for their industry are," said Rep. Terri Austin, D-Anderson, an author of one of the bills.
The House passed similar legislation in 2004, when Democrats last controlled the chamber. But the GOP-majority Senate killed the bill, largely because Robert Garton, then the chamber's leader, didn't support an expansion of gambling.
Garton was defeated in last year's Republican primary, and new Senate President Pro Tem David Long, R-Fort Wayne, said yesterday that he is willing to allow a hearing on the bill if that is the desire of his caucus.
"I'm not a fan of gambling or an expansion of gambling in the state," Long said. "But I am not going to let my personal opinions stop issues from being heard in committees and getting them aired out properly so the public can have their say and the legislators can receive their input."
House Minority Leader Brian Bosma, R-Indianapolis, said yesterday that the proposal has its best shot in years, in part because legislative leaders have not stepped up to oppose it.
Also, Bosma said, the state's casinos no longer are located only at the borders.
"We've broken the taboo of having land-based casinos now, with the French Lick boat on a moat," he said of the new casino in Orange County. "So I'm not sure that the issue of not having land-based casinos at our two tracks is any longer a problem."
Republican Gov. Mitch Daniels said late last year that he does not support an expansion of gambling. He has sometimes hedged on the issue of slot machines, however, saying he would consider the legislation if it did not give them directly to the tracks but allowed for competitive bidding for the right to operate them.
Under that scenario, the racing industry still would benefit from some of the profits.
Also, Daniels said when he was running for governor that permitting slots at tracks might not be an expansion of gambling if the legislation takes away unused OTB licenses.
Both bills would do that, although neither includes competitive bidding for the right to operate the slots. In both proposals, the tracks would own the machines.
The bills filed by Austin and Rep. Scott Reske, D-Pendleton, impose taxes that are similar percentage-wise to those paid by casinos, which are on a sliding scale. The proposed tax rates for the slots range from about 32percent to 37percent.
The bills designate millions of dollars to the communities near the tracks, but Reske's House Bill 1402 also includes $100million annually that would be spread among all noncasino counties. Another $100million would come to the state for programs, including full-day kindergarten and expanded health-care options.
Austin's bill focuses on economic-development programs and provides some money for mass transit.
"I have always believed that gaming revenue from a public policy standpoint should really be used to promote growth and economic development, not to fund state government," Austin said. "We need to invest it in ways that we can grow our reliance away from it."
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