Al Cross Gets It Right On Kentucky's Gambling Gambits.

Standoff at the special session
By Al Cross

FRANKFORT, Ky. — It should have been no surprise that the special session of the General Assembly has produced old-fashioned legislative log-rolling, aspersions about corruption, a fist-in-the-face maneuver, an epic debate in the House, suspense about the outcome, and political risks for most of the players.

After all, the session was called without a consensus and its main issues have been horse racing, the closest thing our state has to a brand, and its handmaiden, gambling — which is inherently controversial, especially in a state that is religious and socially conservative. That creates a fundamental conflict with which the state has wrestled for more than a century.

Hours before the session began, Attorney General Jack Conway issued an opinion that the state lottery could include video terminals that function as slot machines. It relied in large measure on debate in the 1891 convention that wrote our state constitution, and a 1931 court decision upholding pari-mutuel wagering. In the decade before that decision, races for governor were won and lost on the issue. The debates kept the state from addressing bigger problems.

In 1988, voters amended the pertinent part of the constitution to allow the lottery, at the behest of a governor who had been elected on the issue and promised that most of the money would go to schools and preclude tax increases. The legislature, seeing that earmarking in other states had created a shell game that shortchanged education, didn't dedicate the money for a specific purpose. Then a court decision forced the legislature and the governor to pass a big tax increase for schools. Two years later, a passel of legislators and lobbyists were convicted on corruption charges in an FBI sting built around horse-racing legislation.

The lottery money was finally dedicated to college scholarships, but that was long after the above chain of events deepened voters' suspicion and distrust of Frankfort lawmakers, especially when it came to an aromatic issue like gambling. And that is likewise true of the latest sequence, in which Democratic Gov. Steve Beshear was elected on a platform of a constitutional amendment referendum to allow casinos, then switched to video slots at racetracks without a referendum, via the legislative and technological sleight of hand endorsed by an attorney general's opinion that contradicted statements by the lottery bill's sponsor.

This slippery background made it easy for Republican Senate President David Williams to revert to his old demagoguery last week, as he suggested House Democrats were in league with corrupting elements as they assembled the votes for the slots bill.

"We need to get out of town before some people in the House get into trouble," Williams said, explaining his tentative plan to summarily adjourn the Senate after sending the House a bill that included his alternate plan to help the threatened horse industry — a plan Beshear had refused to add to the special-session agenda. Other foes of the slots bill said House Speaker Greg Stumbo was "buying votes." The air was fraught with felonies.

Actually, Stumbo rounded up the votes he needed with a plan to use taxes on slots revenue for a bond issue to replace dilapidated schools. Yes, it bought some votes, but not in the nefarious manner represented. Still, some House members refused to sacrifice anti-gambling principles for bricks and mortar, and headlines juxtaposing "schools" and "slots" caused queasiness, even among voters who think tracks need slots to compete against "racinos" in other states. Knowing that, Williams dubbed the plan "slots for tots."

Williams' own plan would address the acute symptom of the racing industry's problem, meager race purses that drive horses to states that boost purses with slots revenue. But it would do relatively little to address the chronic problem that threatens the industry: the weakness of small tracks that enable our relatively small state to have year-round racing.

Also, Williams probably underestimates the effect that a 10 percent tax on lottery tickets would have on ticket sales, and there are legal questions about whether the tax could apply to multi-state Powerball tickets and whether Kentucky could tax out-of-state wagers on Kentucky races, as he proposes.

Given those questions, Williams' plan seemed more of a blocking maneuver, but he probably needed an alternative to keep some Republican senators from voting for slots. And his threat to adjourn may have been aimed more at House members, making them think that a controversial vote for slots would amount to political risk without prospect of reward. In Friday's debate, Stumbo warned House members not to be intimidated by any senator.

The widely differing approaches of the House and Senate, and the fact that the slots bill passed the House with only one vote to spare, make it unlikely that the issue will be resolved during this session. That may be a good thing, if the current drama can start a story line that leads to some sort of compromise, or at least a referendum on something — slots, casinos, whatever — to get the gambling issue off dead center and help the horse industry.

Voters were told two years ago that they would get a chance to vote on the expansion of gambling, and polls showed huge majorities wanting to get that chance. Constitutional amendments cannot be proposed in special sessions, and can get on the ballot only when legislators are up for election. The next opportunities will come in the session that begins in January and the election of Nov. 2, 2010. Let that be the day that Kentucky voters finally close this chapter in the state's long history of gambling and focus on other issues.

Al Cross, former Courier-Journal political writer, is director of the Institute for Rural Journalism and Community Issues in the School of Journalism and Telecommunications at the University of Kentucky. His e-mail address is al.cross@uky.edu. His views are his own, not those of the University of Kentucky.