Expanded gambling fades as an issue, but lingers as a potential source of revenue; Conway eyes it for pensions

By Jerry Seale

University of Kentucky School of Journalism and Telecommunications

The long-running issue of expanded gambling is not in the primary focus of the candidates in the Nov. 3 gubernatorial election, but it could play a role in the next governor’s administration.

Republican Matt Bevin once went as far as to dismiss the issue as “almost irrelevant,” and has made it clear he has no intention of making a push to bring in casinos if he is elected.

“I don’t think it’s the solution to what ails us financially in this state,” Bevin said during the October 6 gubernatorial debate.

Democrat Jack Conway has pointed to expanded gambling as a likely source of revenue that bond-rating agencies want dedicated to Kentucky’s pension system, which has been described by many as being in a state of “crisis” because it is so underfunded, causing the state’s bond rating to drop.

“If we’re looking for new revenue, I think gaming is the most obvious place to look,” Conway said on Louisville’s WFPL Radio Oct. 9.

Independent candidate Drew Curtis is not much more enthusiastic about the idea of casinos in Kentucky than Bevin is, but is not ruling it out either. “Our pension system is in dire shape, so we must consider all options,” he told WFPL.

The expansion of gambling and the creation of casinos in Kentucky was a major part of Gov. Steve Beshear’s platform when he first ran for the office in 2007, but it has not materialized.

Many who share Conway’s stance have looked to Illinois, Indiana and Ohio as evidence that Kentucky should expand gambling. A PricewaterhouseCoopers LLP study showed more than $1 billion a year is spent by Kentuckians in casinos of other states. Some believe bringing casinos would keep a large portion of that money in the state, but the Family Foundation of Kentucky says gambling targets families, hurts businesses, corrupts government and hurts vulnerable citizens.

The horse industry in Kentucky declined during the Great Recession. The numbers of races and horses dropped, as did participation and betting at the races. Revenue from expanded gambling, if put into race purses, could help the industry prosper again.

House Speaker Greg Stumbo, D-Prestonsburg, has said he will propose a bill to amend the state constitution to allow seven casinos to operate in Kentucky. If approved, tax revenue from the casinos would be given to schools, the pension system and the racing industry.

If approved by three-fifths of legislators in both houses, the amendment would go on the November 2016 ballot for voters to decide.

Despite their differing stances on expanded gambling, Conway and Bevin have both said they would like to see voters decide the issue.

However, several factors stand as obstacles to the legalization of casino gambling in Kentucky. Gene Clabes, executive editor of KyForward.com, said Ohio and Indiana have “leapt ahead” of Kentucky on the casino front, as can be seen by looking at the transformation of the Belterra race track in Indiana near Cincinnati.

“Kentucky is years behind,” Clabes said. “One factor to keep in mind is that the horse industry is divided on casino gambling versus instant racing. It seems this division doesn’t bode well for a favorable outcome for casino gambling without unity from the industry.”

Instant racing, recently introduced to Kentucky, uses devices that greatly resemble slot machines to base betting on the outcome of past horse races. It might cause support for casino gambling legalization to wane, if bettors and tracks are content with it and feel no need to try to push for more.

Instant racing is lucrative. A report to the Kentucky Horse Racing Commission said terminals at the Red Mile track in Lexington took in just over $5 million in wagers.

Here are the candidates' positions on several issues

This post may be updated with summaries of other issues.

ECONOMY
     Democrat Jack Conway and Republican Matt Bevin's economic positions adhere in large part to party orthodoxies. Bevin plans to make the Bluegrass more competitive by passing "right to work" legislation, which would outlaw labor contracts that require workers to pay union dues or fees. Conway's plan to bring more jobs to Kentucky primarily focuses on education. He plans to align job-training programs to the needs of employers and plans to work with schools to improve graduation rates. Conway wants an increase in the minimum wage to $10.10 an hour. Bevin opposes that idea, and his running mate, Jenean Hampton, said an increase to minimum wage would be "disastrous." Independent Drew Curtis favors the increase and says he will look at policies in other states and bring the successful ones to Kentucky, hoping to bring a "tech boom" to the Bluegrass by focusing on technology training. –Ben Johnson

EDUCATION

     Republican Matt Bevin says Kentucky needs to back out of the nationally adopted State Common Core Standards because they “doesn’t adequately address the diverse needs” of the state. Bevin also wants to guarantee school choice, including charter schools and tax credits for private education, and has said families who home-school their children should have access to the same public amenities provided to kids who attend state-funded schools. He favors outcomes-based funding for higher education, with emphasis on producing degrees that will help the economy.

     Democrat Jack Conway wants to expand early childhood education, first to 3- and 4-year-olds in homes with incomes up to 138 percent of the poverty level, with a goal of 200 percent. He supports Common Core and opposes charter schools and tax credits for private education. He says he would look at outcomes-based funding but wants to maintain a level playing field for universities.

     Independent Drew Curtis wants to expand early-college programs in high schools and says a budget cut to education is one of the last things he would recommend. However, he also says solving Kentucky’s pension problem is one of his first priorities, so education funding issues would have to wait at least a year. –Kevin Erpenbeck

DRUGS

     Drug abuse is a growing problem for Kentucky, which has the nation’s third highest death rate from drug overdoses.  The number of heroin overdoses has tripled in the last three years alone. There are limited treatment options available, with only one-tenth of the treatment beds needed. Here is how the three candidates for governor say they will deal with that problem:

     Democrat Jack Conway notes his history of fighting drugs as attorney general. He supports the local-option needle exchange program and calls for more education and treatment but has yet to provide a solution on how he will pay for that. He opposes legalizing marijuana for medical purposes and says people on Medicaid should be tested for drugs only with probable cause.

     Republican Matt Bevin says he would randomly drug-test Medicaid recipients but otherwise has talked less about the state’s drug abuse crisis than Conway. He says the key is intervening earlier and creating better economic opportunity. He says the state spends too little on behavioral health and supports legalizing marijuana for medical purposes.

     Independent candidate Drew Curtis supports decriminalizing addiction. He suggests copying Massachusetts’ program on tackling opiate addiction if it proves successful. –Megan Ingros

GAMBLING

     Expanded gambling, an issue that could have an impact on the state’s economy budget, is viewed with differently by all three candidates but isn’t a strong point of focus for any of them.

     Democrat Jack Conway favors a referendum on the issue and says the time could be right for it, to create revenue for the horse racing industry, pensions and early childhood education, since bond-rating agencies have said the state needs a dedicated revenue stream to shore up its pensions.

     Republican Matt Bevin stands on the opposite end of the spectrum. During an Oct. 6 debate, he rejected gambling as a possible solution to any of Kentucky’s problems. “I don’t think it’s the solution to what ails us financially in this state,” he said.

     Independent candidate Drew Curtis stands right in the middle. While not much more enthralled by the idea of expanded gambling than Bevin, he hasn’t been willing to completely dismiss it just yet. “Our pension system is in dire shape, so we must consider all options,” Curtis told WFPL Radio. –Jerry Seale

HEALTH CARE AND INSURANCE

     In regard to Medicaid, the federal-and-state-funded health insurance for lower-income people, Democrat Jack Conway wants to stay where we are right now and Republican Matt Bevin does not.

     Conway wants to keep the Kynect health-insurance marketplace and the expansion of Medicaid to people with incomes up to 138 percent of the federal poverty line, saying he believes the state-funded study that shows the expansion is paying for itself by adding so many people to the health-care system that enough jobs and tax revenue will be created to cover the state’s cost – starting at 5 percent in 2017 and rising to the federal health reform law’s limit of 10 percent in 2020.

     Bevin scoffs at the study, saying the expansion is unsustainable, and says he would apply for a federal waiver to change it to a program in which some people pay premiums, co-payments, deductibles or health savings accounts. He also wants to use the federal exchange and abolish Kynect, which is funded by a 1 percent fee on all health-insurance policies sold in the state. The federal exchange charges 3.5 percent on policies it sells.

     Independent candidate Drew Curtis is against abolishing Kynect and wants to stand and watch what happens with the Medicaid expansion. He says it seems likely to pay for itself in the near term. –Lauren Allen

SMOKING BAN
     Democrat Jack Conway favors a statewide ban on smoking in public places. Republican Matt Bevin says local communities should decide the issue for themselves. Independent candidate Drew Curtis favors a ban that exempts cigar bars and other establishments related to smoking. –Al Cross

TAXES
     Republican Matt Bevin calls for comprehensive tax reform that includes reduced income-tax rates on businesses and individuals and repeal of inheritance and inventory taxes.
     Democrat Jack Conway endorses bipartisan tax reform that would not increase overall revenue. He has called for ending the inventory tax.
     Independent Drew Curtis wants to change income-tax brackets to percentages of income, not dollar amounts, to adjust to inflation, and supports "an across-the-board reduction in exemptions, with the goal to elimimnate as many as possible over the next decade." –Al Cross