Kentucky Bill Seeks to Redirect Gambling Tax Revenue to Local Governments

A bill recently introduced in Frankfort aims to allocate a portion of the tax revenue generated from horse racing and gaming establishments, such as Owensboro Racing & Gaming, to local governments where these facilities operate.

Proposed Local Government Fund

House Bill 782, if enacted, would establish the “Pari-Mutuel Racing Local Government Fund.” This fund would be overseen by the Department of Local Government, which would determine how cities and counties hosting horse tracks and gaming centers could use the money. The primary focus of the fund would be on addressing the “social costs of problem gambling,” as stated in the bill.

Potential uses for the funding include initiatives for retaining law enforcement personnel, tackling homelessness, and ing affordable housing programs.

Existing Problem Gambling Fund Lacks Local

Kentucky currently maintains a statewide Problem Gambling Assistance Fund, which is financed through excise taxes from gambling and sports wagering. However, there is no equivalent financial specifically allocated to the localities where gaming facilities are situated.

The bill is sponsored by Representative Al Gentry, a Democrat from Louisville who serves as the Minority Caucus Chair for the House Democrats. Gentry pointed out that while gaming excise tax revenue is presently distributed among the horse breeding industry, the state’s problem gambling fund, and the state government, House Bill 782 would shift a portion of these funds directly to local governments.

This reallocation would not introduce any new taxes or raise the current excise tax rate, Gentry emphasized.

“There’s no new tax here,” Gentry stated. Additionally, he assured that funding for the state’s equine industry would remain unaffected. A large share of excise tax revenue continues to be directed toward the development of thoroughbred, standardbred, quarter horse, Arabian, Appaloosa, and paint horse breeds, along with various horse-related programs.

“It does not take money from any equine industry that receives revenue” from the tax, Gentry noted. “It simply taxes (a portion) of the money that would go to the state general fund.”

The legislation proposes that an amount equal to 0.1% of all wagers be allocated to the newly established local government fund.

Comparisons with Other States’ Gambling Revenue Distribution

Daviess County, home to the $100 million Owensboro Racing & Gaming facility, features historic horse racing machines and allows sports wagering as well as simulcast horse race betting. Kentucky legalized historic horse racing machines in 2021, with these devices relying on the outcomes of past races to determine results.

Gentry referenced other states with historic horse racing operations, explaining that they designate a portion of their excise tax revenue for local government . Similarly, states with traditional slot machine gaming allocate some of their tax revenue to assist local communities that house gaming establishments.

The structure of House Bill 782, Gentry stated, is modeled on similar practices found in other states.

Gentry mentioned that he has had discussions with Representative Matthew Koch, a Republican from Paris and the chairman of the Licensing, Occupations, and istrative Regulations Committee. However, due to the limited time remaining in the current legislative session, he does not anticipate the bill will be brought up for consideration this year.

Instead, Gentry hopes that lawmakers will evaluate the proposal during the legislative interim, potentially setting the stage for action in a future session.

In addition to House Bill 782, Gentry has introduced House Bill 781, which focuses on problem gambling awareness and prevention. This measure would mandate that horse tracks and gaming venues offering historic horse racing implement staff training programs to identify signs of problem gambling and respond appropriately.

Under the bill, gaming facilities would also be required to post information about resources for problem gamblers, including helpline numbers. Additionally, similar information would need to be incorporated into the facilities’ marketing materials.

Gaming operators would further be required to document and report their efforts to address problem gambling and direct affected individuals toward assistance programs.

“Why not have some preventative standards?” Gentry remarked, emphasizing the importance of proactive measures to mitigate gambling-related issues

Source:

‘’Bill would allocate some gambling tax revenue to local governments where facilities are located’’, messenger-inquirer.com, February 24, 2025.