Sen. Julian Carroll, D-Frankfort, filed a bill in Kentucky’s 2018 General Assembly to set up a framework for sports betting but it was not considered. | Courtesy Lexington Herald-Leader

By Jack Brammer and Janet Patton | Lexington Herald-Leader

Kentucky should take advantage of the U.S. Supreme Court’s decision Monday to legalize sports wagering to ease its public pension problem, said the spokesman for a group of retired state workers.

The high court’s decision “provides an outstanding opportunity to provide badly needed funding for public pensions,” said Jim Carroll of Kentucky Government Retirees. “We urge Frankfort leaders to take the initiative by passing a bill that authorizes sports wagering and earmarking the resulting revenue for pensions.”

Horse racing officials are interested.

With the Supreme Court ruling, “our multibillion-dollar industry must rise to the challenges and seize the opportunities presented by this expansion of sports betting,” said Alex Waldrop, president and chief executive officer of the National Thoroughbred Racing Association.

The association, based in Lexington, is a coalition of more than 100 horse racing interests and thousands of individuals.

Alex Rankin, chairman of the board of Churchill Downs Inc., said in an interview before this year’s Kentucky Derby that the casino and racing company is deeply interested in the prospects of sports betting.

“Obviously, the regulatory environment has to change. It would be something we’d take a hard look at, and we’re doing a lot of thinking about,” said Rankin. “I think real-money gambling on the internet (is) a subject we’re paying great attention to. I would think, depending on how it sorts out, if it’s a possibility we’d take a look at it.

The Kentucky legislature had its chance this year to act on a sports wagering bill but did not take it up.

“I told them so,” said state Sen. Julian Carroll, D-Frankfort, when reached Monday about his bill to provide a framework for sports betting in Kentucky if the high court allowed it. “They didn’t even take it up in committee.”

In its decision, the Supreme Court struck down a 1992 federal law that had stopped most states from authorizing sports betting. The ruling came from a case in New Jersey, which argued it should be allowed to legalize gambling on sports.

Carroll said he talked to Senate Republican leaders about his bill during the legislative session but was told the measure should be taken up in the House.

“I mentioned it several times during speeches on the floor and wished the Senate leaders had moved hard,” he said. “I will bring it up again the next time the legislature meets.”

The Kentucky General Assembly is not expected to meet again until next January but could meet in a special lawmaking session if called by the governor.

Gov. Matt Bevin had no immediate comment on the Supreme Court ruling. Kentucky did file a friend-of-the-court brief in the case, supporting New Jersey.

Senate Majority Leader Damon Thayer, R-Georgetown, said he was not surprised by the court ruling but does not know if Kentucky will participate in sports betting.

“We are going to have to make a decision about it,” he said.

Thayer said he personally favors sports betting but does not know if there are enough votes in the legislature to approve it.

“So far, there is no consensus on it in Kentucky,” he said. “We have to find out how it would be handled, would a constitutional amendment be required? Lots of questions need to be answered.”

He said the Senate did not take up Carroll’s bill this year because the Supreme Court had not yet acted and there was no agreement among lawmakers on the issue.

Carroll said he did not know exactly how much money his bill would raise for the state’s coffers but he said sports betting in Las Vegas has reaped hundreds of millions of dollars for the state.

“A betting state like Kentucky should do well with sports betting,” he said.

Under Carroll’s bill, the Kentucky Horse Racing Commission would have authority to implement new regulations for sports betting.

His priority for its proceeds, said Carroll, would be public pensions and education.

Under terms of his bill, operators would have to pay an initial licensing fee of $250,000 and a 20 percent tax on gross gambling revenue. From funds collected, 60 percent would go to the Kentucky Employees Retirement Systems Non-Hazardous and Kentucky Teachers’ retirement funds.

The betting could only be on collegiate and professional sports and coaches and team members would be prohibited from wagering, said Carroll.

In the final days of this year’s session, the legislature approved a controversial pension reform bill. It put new teachers in a “hybrid” retirement plan that includes parts of both the traditional pension and a 401(k)-style savings plan and spelled out that teachers could only use sick days they’ve accumulated up to Dec. 31, 2018, toward their retirement. The bill is now being challenged in court.

The legislature, at Bevin’s urging, approved a budget that provides about $3.3 billion over two years to fund Kentucky’s public pension systems, which now have an unfunded liability of more than $40 billion.

Kent Ostrander, executive director of The Family Foundation, a conservative group based in Lexington, said in a news release that he is “concerned about the headlong pursuit of other people’s money upon which the gambling industry is always focused.”

“Banks offer loans to help their customers financially and investment advisers give counsel to help increase their clients’ assets but the gambling industry focuses on ways to separate their patrons from their assets and acquire them,” said Ostrander.

He said he is confident that the General Assembly’s priority “will be protecting our citizens, as opposed to first promoting the rights of the gambling industry.”


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