Kentucky Lawmakers Push for Local Share of Gaming Revenue

A growing push from Kentucky lawmakers aims to ensure that local communities receive a direct share of the revenue generated by gaming facilities, marking a significant shift in how the state handles the taxation of legal gambling. The proposal, encapsulated in House Bill 782 (HB 782), comes at a pivotal time, as the state debates the legalization of casino gaming through another bill, HB 33. If passed, these measures could transform both Kentucky’s gaming landscape and its relationship with local governments.

Currently, all gaming tax revenue in Kentucky flows directly into the state’s general fund, with no designated portion reserved for local municipalities. Lawmakers behind HB 782 argue that local governments, which bear the brunt of the social and infrastructure challenges associated with casino operations, should receive a financial stake in the benefits of gambling. The bill seeks to create a “pari-mutuel racing local government support fund” that would send money from the state’s general fund to local communities where casinos operate.

Offsetting the Cost of Casino Presence

The move to share gaming revenue with local governments reflects an effort to address concerns that accompany the introduction of casinos into communities—especially worries about rising crime rates and increased costs for local services. Critics of casino gaming often point to the potential for increased crime and higher policing needs, as well as the strain casinos may place on local infrastructure, including housing and law enforcement resources. HB 782 takes these concerns into account by suggesting that the allocated funds could be used to support local law enforcement, affordable housing, homelessness programs, and the policing of live and historical horse racing facilities.

The broad language of HB 782 leaves room for local governments to prioritize their own needs, but the suggested uses give a clear indication of the areas that may require additional resources due to the presence of casinos. By allowing communities to access funds specifically designed to alleviate the potential social and financial impacts of casinos, the bill aims to address one of the most significant obstacles to casino legalization: the potential backlash from local residents and lawmakers worried about the cost of living and public safety.

The proposal’s emphasis on local benefits could help shift the conversation around casinos in Kentucky, especially as HB 33, a companion bill to HB 782, moves forward. HB 33 would legalize casino gaming in Kentucky, allowing the state’s racetracks to upgrade their offerings and operate full-scale casinos. However, it also includes a provision that would give local municipalities the right to vote on whether or not they want a casino in their area, provided they meet certain population requirements.

This opt-in approach has proven successful in other states, where local voters have weighed in on whether they support casino development in their communities. In Louisiana, for example, lawmakers allowed parishes to vote on casinos, with 55 out of 64 parishes approving the measure. Similarly, in Virginia, voters in five cities were given the opportunity to approve or reject casinos. Four of those cities voted in favor of casinos, while Richmond rejected them twice.

The local vote provision in HB 33 signals that Kentucky lawmakers are keenly aware of the importance of local consent when it comes to casino development. Many localities have embraced casinos as a means of boosting economic development, with proponents arguing that the financial benefits far outweigh the potential drawbacks of increased crime or a higher cost of living. However, HB 782 adds an additional layer of incentive by offering local communities a way to manage and mitigate the potential downsides.

A Sweeter Deal for Communities on the Fence

The inclusion of local revenue-sharing provisions in HB 782 could be the key to securing broader support for casino legalization in Kentucky. For communities that are hesitant about the social implications of casinos, knowing that they will have access to dedicated funds for policing, housing, and homelessness could make the prospect of casinos more palatable. By providing local governments with a financial cushion, the bill seeks to ensure that they are not left to bear the brunt of the costs associated with gambling operations.

As Kentucky moves closer to potentially legalizing casinos, the interplay between HB 33 and HB 782 will be critical in determining the long-term success of the state’s gaming industry. The revenue-sharing component of HB 782, coupled with the local vote provision in HB 33, reflects a balanced approach to casino expansion—one that seeks to weigh the economic benefits of casinos against the potential for social costs.

If Kentucky follows the example set by other states that have implemented opt-in models, the widespread adoption of casinos seems likely. However, the passage of HB 782 could ensure that communities, particularly those on the fence about gambling, are incentivized to support the industry, knowing that any challenges associated with casino operations will be offset by new revenue streams.

 

HB 782 ensures that local governments have the resources they need to address the challenges posed by casinos, from law enforcement to affordable housing, helping communities manage the social and financial impacts of gaming.

Conclusion

As Kentucky prepares to make a historic decision on casino gaming, the introduction of HB 782 presents a promising solution to the concerns of local governments. By earmarking gaming revenue for use in addressing potential challenges such as crime, housing shortages, and law enforcement needs, the bill provides a tangible benefit to communities that may otherwise be wary of casinos. With local communities set to play a pivotal role in deciding the future of gambling in Kentucky, HB 782 could prove to be a crucial tool in securing broad support for the expansion of legal gambling in the state.