Beshear's video slots plan

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June 9, 2009

Gov. Steve Beshear released details of a new bill Tuesday morning that was developed in concert with statehouse Democratic leaders to provide millions of dollars to Kentucky's equine industry and tax breaks for vehicle owners and active military duty in addition to raising hundreds of millions for the state treasury.

"Kentucky's signature horse racing industry is in a state of crisis,"
Beshear said in a statement. "I believe my proposal will help level the playing field for Kentucky's horse industry."

Under the plan racetracks would pay an initial application fee of $25,000 plus licensing fees on a sliding scale up to $100 million to install video lottery terminals (VLTs) that simulate slot machines, pokers, and other casino games.

Some examples of licensing fees are: Turfway Park would pay $100 million, Churchill Downs in Louisville and Keeneland in Lexington would each pay
$75 million, and Thunder Ridge in the east Kentucky mountains would pay $20 million. Licenses would be for 10 years.

State Rep. Dennis Keene, D-Wilder, who chairs the House Licensing and Occupations Committee, said "In order for the VLT (video lottery terminal) legislation to pass, we must ensure it will help and support every region of our commonwealth, not just the areas with racetracks."

SUMMARY OF GAMBLING BILL

. Beshear's plan assumes that video gambling at the state's race tracks would generate $796.7 million and provide $297.6 million to the state's
general fund in the first year casinos of operation. By the sixth year,
revenue is projected to exceed $1 billion with the general fund receiving about $270 million.

. Gaming revenue would be taxed at 25% for five years and then 35% after five years. The horse industry would receive 14.5% of the money to boost purses and offer breeding and other incentives. The horse industry also would receive other tax breaks on the costs of breeding, feed, equipment, etc.

. The casinos would offer video gambling devices known as Video Lottery Terminals (VLTs), which provide players with slot machines, poker and other casino games on video monitors. The Kentucky Lottery Corp. would regulate and oversee casino operations.

. Taxpayers would receive a $30 million non-refundable individual annual income tax credit equal to 50 percent of the state property tax paid on registered motor vehicles. The state income tax credit could not exceed $500 a year.

. All active duty military personnel would be exempt from individual income tax saving them $18 million a year.

It is unclear if Beshear has the votes to pass the gambling bill.

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