Kentucky Wins’ Jonathan Blue: Churchill Downs supports downtown casino, one of seven proposed in Kentucky

Screen shot 2013-10-22 at 2.03.21 PMFor more than 20 years, the thoroughbred industry tried without success to get a constitutional amendment necessary for expanded gaming including casinos at Kentucky’s thoroughbred tracks.

Now, Louisville business executives and economic development officials have created a coalition, Kentucky Wins, a broad and well-financed effort to do what Churchill Downs and thoroughbred breeders couldn’t do.

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Jonathan Blue

Instead of advocating expanded gaming to save Kentucky’s struggling thoroughbred racing industry, the new group – led by Louisville business leaders Jonathan Blue and Ed Glasscock, along with Lexington lobbyist Terry McBrayer – is advocating expanded gaming as a way to enhance tax revenue at a time tax increases are a tough sell.

The most dramatic development, said Blue, chairman and managing director of Louisville-based Blue Equity, is that Churchill Downs executives have moved away from their position that any Louisville casino would have to be at Churchill Downs.

“Churchill Downs wants to be involved. This is the first time ever they’ve dropped their resistance to anything that’s not on Central Avenue,” he said. “They’ve always wanted to protect themselves 100 percent.

“Now, they’re okay with a downtown casino.”

Earlier this year, horse breeders and owners were debating whether to oppose any bill in the General Assembly that didn’t guarantee racetracks a monopoly on casinos.

Ed Glasscock

Ed Glasscock

At the time, Gov. Steve Beshear told the Lexington Herald-Leader that if the state’s racetracks supported an expanded gaming bill that did not include a monopoly, “we would have the votes in the Senate now to pass that type of amendment.”

From that Feb. 5 post:

I do feel confident that if all of the industry would get its act together and if these tracks would step up and support this approach, along with the breeders and owners, we would have a real shot at passing something this session.

What happened within the industry since then is unclear.

Martin Cothran

Martin Cothran

Expanded gaming opponent Martin Cothran, senior policy analyst for the conservative The Family Foundation of Kentucky, says he sees no evidence other racetracks in Kentucky support the plan.

Churchill, Cothran said, makes most of its revenue from casinos in other states: “We don’t consider Churchill a prominent part of the horse industry.”

Churchill Downs executives were not immediately available for comment. However, Churchill Downs Chairman and CEO Bob Evans is a Kentucky Wins co-chairman.

Churchill Downs insiders not authorized to talk about the details confirmed that, broadly speaking, Kentucky Wins has the support of the publicly traded company.

The Kentucky Wins strategy is to convince political leaders in both parties of a singular reality: Kentucky can embrace gaming or watch an increasing number of casinos in Indiana and Ohio pull an estimated $500 million in potential tax revenue out of the state with their casinos.

If the pro-gaming lobby is successful, it could instantly turn Kentucky into a major player, so to speak, in the casino world. The group envisions seven casinos across the state –including one in downtown Louisville – each requiring investors to put up $150 million.

“The General Assembly will have to decide the minimum capital investment,” said Glasscock, an investor, attorney and chairman emeritus of Louisville-based Frost Brown Todd law firm. “But that level of … investment would assure a high-quality casino.” Most would be at existing tracks.

In a recent interview, Glasscock was almost evangelical about Kentucky Wins’ chances of getting expanded gaming as a way to generate budget revenue to upgrade education and cover state budget deficits. Kentucky needs funding in a variety of areas, including K-12 and higher education, increasing unemployment related to declining demand for coal, Eastern Kentucky’s main source of jobs, and the state’s public-employee pension crisis.

Casino opponents “will have (a difficult time) fighting against K-through-12 education … helping Eastern Kentucky deal with plummeting revenue from the severance tax,” Glasscock said. “How are you going to develop a campaign against that?”

Cothran said the counter-argument is that if casinos come to Kentucky, the majority of profits they generate will go to gambling operations based in other states.

Glasscock says Kentucky Wins advocates 80 percent of the projected $500 million annual tax revenue from gambling would go to the general fund. Twenty percent would go to the horse industry. The racing industry injects about $3 billion annually into Kentucky’s economy, he said, accounting directly for about 40,000 jobs in the state, “and I think it’s more.”

Expanded gaming is projected to be a $2 billion-per-year business in Kentucky, with annual payroll of $300 million, Glasscock said.

“This is about 10,000 new jobs,” Blue said.”You’d have to bring a Fortune 500 company to town to achieve that, and you would have to give them incentives. With (expanded gaming,) there are no incentives, and this could happen instantly.”

“We’re as bullish as we’ve ever been,” he said. “We think now is the time” to move forward with getting expanded gaming approved in Kentucky. “We believe this is the best chance we’re going to have.”

Rather than a narrow campaign, the 3-month-old Kentucky Wins campaign is taking a “holistic” approach in an attempt to win broad support east to west across the state, Glasscock and Blue said.

Glasscock pointed to recent polls by the Herald-Leader and the Courier-Journal newspapers indicating that about 90 percent of Kentucky voters at least want the right to vote on casinos. Kentucky Win data shows a majority of Kentuckians support expanded gaming as an alternative to raising taxes.

Louisville leadership supporting Kentucky Wins includes Metro Mayor Greg Fischer and state senators Dan Seum and Denise Harper Angel. Kentucky representatives include Julie Raque Adams and Denver Butler.

Also on board is the Greater Louisville Convention and Visitors Bureau. He sees a downtown casino as a way to stop losing gambling dollars to Cincinnati, which has just opened a downtown casino, said Jim Wood, CVB president and CEO.

Wood said the top priority for CVB executives is an expanded Kentucky International Convention Center.

But if downtown had a larger convention center, new urban bourbon distilleries and a casino, it would make Louisville among the most competitive convention markets, Wood said.

Gambling opponent Cothran says he doubts the Kentucky Wins effort will get a constitutional amendment through the General Assembly, because the campaign doesn’t resonate with ordinary people on the grassroots level.

“All most ordinary Kentuckians are going to see,” he said, “are a bunch of rich people trying to make other rich people richer.”

Business leaders and elected officials on the Kentucky Wins executive board include:

Jim Allen, Hilliard-Lyons

Vickie Yates Brown, Nucleus

Mark Brown, Sazerac

Sandra Frazier, Tandem Public Relations

Craig Greenburg, 21C Museum Hotels

Mary Moseley, A. J. Schneider Co.

Steve Trager, Republic Bank & Trust Co.

Ann Wells, Commonwealth Bank

Steve Wilson, 21C Hotels

Craig Richard, GLI

Agricultural Comm James Comer

State Auditor Adam Edelen

Senator Dan Seum

Senator Gerald Neal

Senator Morgan McGarvey

Senator RJ Palmer

Senator Denise Harper Angel

Rep David Osborne

Rep Julie Raque Adams

Rep Susan Westrom

Rep Denver Butler

Louisville Mayor Greg Fischer