Legislative Update for Week # 7

by Representative David W. Floyd

Gambling on the Promises

Do we want casinos in Kentucky? If the General Assembly passes a constitutional amendment the people of Kentucky would vote on it this November. The major plans authorize casinos at racetracks only, or casinos at a combination of cities and racetracks. Instead of calling them “casinos” advocates call it “Expanded Gaming.”

Casinos plan to take in two and a half billion dollars each budget cycle. That’s over $500 from every man, woman and child in the state. The casinos will keep a big chunk of it but say that they’ll pay $940 million in taxes to Kentucky.

The biggest money is behind racetrack casinos. You’ve likely seen or heard commercials funded by KEEP, the Kentucky Equine Education Project. KEEP says that without casinos at their tracks, Kentucky’s thoroughbred industry will collapse. I have friends who agree. KEEP tells you that everyone will benefit from casinos.

How? They say that they’ll split the pot (taxes) with every one of the state’s 120 counties. That’s a powerful temptation. They send letters to legislators: “Rep Floyd, if you don’t support this Nelson County will lose out on three million dollars every budget. Think of the good we can do with that money.” Other promises are to dedicate the tax money to: early childhood education, nurse training facilities, horse trails, health care, green space preservation, veterans’ programs, environmental protection, and – here’s irony for you – treatment for gambling addiction.

These promises are made to more and more groups to lure them into the door of the casino. But I don’t believe that we’ll be able to KEEP these promises. How many of you remember the promise of the lottery? Do you remember that all spending was supposed to go to education? Fool me once shame on you, fool me twice…

There is a valid argument that people are gambling across the river – rendering unto Caesar’s – and we shouldn’t let it all go to Indiana. It is argued that, if we build casinos here we will not only KEEP those dollars, but there will be even more people gambling. That’s how they come up with the 2 billion dollar figure. This seems like a reasonable assumption, so let’s look at that.

Each family has only so much money to spend on things other than food, shelter and clothing. That extra money is called “disposable income.” There will be the same amount of disposable income in Kentucky the day after casinos open as there was the day before they opened. Right now families spend that extra cash on restaurants, movies, gadgets, and bigger cars; and those businesses, in turn, pay taxes on their profits. Doesn’t this plan just shift money away from traditional businesses over to casinos?

And where is all that extra gambling money going to come from? Gambling’s excitement sometimes gets people to dig down deeper than their disposable income. It is money that they might otherwise have saved or invested. But friends, casinos aren’t open to give you a return on your investment. They take your money. Across time they always win.

If disposable income is shifted to casinos, what’s going to happen to the small town businesses, the ones away from the big cities? If I owned one that sold food, movies, gadgets or cars this plan would worry me. Maybe casinos are a bad bet.

I said during the 2004 campaign that I’m opposed to expanded gambling but would let a fair proposal come up for a vote by the people. I will honor that pledge. In my mind it’s fair if a gas station in New Hope has the same opportunity as a racetrack in Louisville.

One final thought. Think of all the states that have legalized casinos. Now name for me one of those states that isn’t still looking for more ways to raise tax money. There isn’t one. Our problems wouldn’t end with casinos; we’d just get a whole new set of them.

This past week the House passed a decent bill (HB 508) on Eminent Domain, which I cosponsored. We also voted to keep seat belt use mandatory but not make it a reason for police to stop you. This bill had an interesting time on the floor of the House, and I’d love to tell you about that on Saturday at 10:00 a.m. at Howard’s Hardware in Chaplin.

The next best thing to meeting with you is hearing from you. Please call toll-free 1-800-372-7181 and ask to leave a message for me. I’ll get back to you as quickly as I can. You might also email me through my website, www.davidWfloyd.com.