Sweeping new bill would set up Kentucky racing, gambling regulatory corporation

A sweeping bill introduced Tuesday would create a new standalone government corporation to handle almost all Kentucky gambling and horse racing.

The 281-page bill would set up the Kentucky Horse Racing and Gaming Corp. to regulate all parimutuel wagering, including historical horse racing machines, as well as sports wagering and charitable gaming.

The corporation would replace the existing Kentucky Horse Racing Commission and the Department of Charitable Gaming, both of which are currently under the umbrella of the Public Protection Cabinet.

The language was inserted into a “shell bill” filed earlier in the legislative session and replaces an amendment pushed through the Senate earlier this month by Senate Majority Floor Leader Damon Thayer that would have attached the racing commission to the Kentucky Department of Agriculture. That change appears dead.

Current bill co-sponsor Thayer, R-Georgetown, acknowledged that House Speaker David Osborne, R-Louisville, came with a better idea: To make the regulatory body a standalone agency similar to the Kentucky Lottery Corp. or the Public Service Commission.

The Kentucky Horse Racing Commission regulates all horse racing in the state, including such high-profile races as the Kentucky Derby, as well as the gambling parlors scattered throughout the state that operate thousands of historic horse racing machines.

Senate Bill 299 was discussed in a joint meeting of House and Senate economic development committees. The Senate committee approved the bill Tuesday, with the House committee expected to take it up later this week.

It is unclear when the bill will come to the floors of the chambers for a vote.

This is Day 56 of the session, which is scheduled to end April 15.

Under the bill, Thayer said the members of the existing racing commission would become the first board of the newcorporation, with two-year terms.

Future members would continue to be appointed by the governor but would be subject to approval of the Kentucky Senate. They also would be under the Executive Branch Ethics Commission.

The measure, if approved, would make the regulatory body permanent and prevent it from being dissolved by future governors, as has happened under previous administrations, Osborne and Thayer said.

The bill sponsors said that they consulted many racing industry constituents including the racetracks, horsemen’s groups and Gov. Andy Beshear’s office about the latest changes.

The corporation would not regulate Kentucky’s horse breeding or sales industry, Osborne said. Its president would be chosen by the governor from a list of three names provided to him or her by the board.

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Charitable gaming, which is not currently governed by the racing commission, would come under the corporation in July 2025. The rest of the bill, if passed, would take effect July of this year.

Osborne and Thayer indicated nothing would change concerning licensing and regulating charities like veterans groups and church organizations that operate bingo games and other fundraisers.

But at least one charitable gaming operator, who testified at the committee hearing, expressed concern that the change will harm groups that rely upon the games.

The Kentucky Lottery Corp. would remain separate.

Thayer added that the bill does not affect so-called “gray machines,” which are slots-like games that recently popped up in convenience stores across the commonwealth. Last year, the legislature banned them.

However, the bill does give authority to the corporation over essentially all forms of gaming. Alongside explicit authority over the four currently legal forms of gaming — live horse racing, pari-mutuel wagering, sports wagering and charitable gaming — the bill also gives the corporation authority over “gaming” in general.

The story will be updated.