Supporters of the Democratic gubernatorial nominee are calling his Tuesday victory a “mandate,” and the candidate himself is suggesting his victory indicates a groundswell of support for his Casinocrat agenda of getting casino gambling in Kentucky. Let’s be sure folks are being accurate in their use of the term.
There are approximately 1,596,000 voters registered as Democrats in Kentucky. Of those, only about 143,000 cast their ballot for the winning candidate. That’s less than 9% of registered Democrats. On top of that, 60% of the Democrats voting Tuesday voted AGAINST the winner.
Political spin meisters often employ certain words in less than honest ways to build momentum. One supporter of the winning ticket, state Treasurer Jonathan Miller, appararently can’t do basic math, even after 8 years as State Treasurer (a wholly unneccessary elective office in Kentucky). On election night, he was the first to employ the term “mandate.” Getting less than one in ten of registered “D’s”, of which I’m one, hardly meets the conditions of a “mandate.”
There are only a few days left until the two major political parties determine their gubernatorial candidates. Speaking as a Democrat, there is a disturbing degree of shamlessness among some of the campaigns when it comes to their claims regarding expanded gambling in Kentucky. One campaign for instance is claiming that we need casinos to keep money from leaving the state. The campaign claims we’re building schools, paving roads and providing health care in other states. Its candidates promise to keep the money currently lost in casinos in other states by building casinos here.
This promise is simply the opposite of the truth. It’s a shameless effort to get elected by individuals desperately hungry for power. In fact, the campaign has been disingenuous in the presentation of its projections and their basis, which they have borrowed from the Kentucky Equine Education Project. The approach has included the gross inflation of the amount of money being gambled by Kentuckians out of state or “over the river.” KEEP has claimed that over $500 million is going out-of-state, which must be recovered by having our own casinos. This figure was provided by a consulting firm that does “studies” for the casino industry. We could not expect a balanced study from such a group, and KEEP did not get one.
The last even moderately reliable study was conducted for the state by PriceWaterhouseCoopers in December of 1999. This study, while better than the recent one, was inflated as well, because it failed to provide adjustments for differences in income between Kentucky, Illinois and Indiana, leading to overestimates of how much Kentuckians gambled. They found that $207 million was going out-of state, not just over the river, but to destination casinos in Nevada and New Jersey as well.
The proportion going to destination casinos will not be recovered. Since casino income has been growing very slowly at the border casinos, even allowing for growth at a 3% rate would result in only $254.6 million going out of state. The amount to be recovered would not exceed $200 million and Kentuckians would have to lose seven and a half times this amount ($1.4 billion out of the state’s economy) to accomplish the feat.
The more serious problem, however, is that the money brought home will not stay at home. The casinos at the tracks would be largely owned by out-of-state corporations and investors, who would remove profits from the state. It is already happening with the racetracks as operated now.
The largest operation, Churchill Downs, is mostly owned by non-Kentuckians. Twelve large investors (in 2005) held 51.5% of the stock. Duchosois Industries sold Arlington Park to Churchill for 24.2% of Churchill’s stock. Of the other major owners holding more than 1% of Churchill, most are major banks or investment firms located in Boston, Chicago, and New York. One banker and one horse farm owner from Kentucky together own 2.2%.
The dividends, disbursements, and profits from Churchill flow out of the state and much larger amounts would do so if the tracks get casinos. If the same proportion held for the other 48.5% of the shareholders in this publicly held corporation, Kentuckians would own 4.4% of Churchill Downs the umbrella corporation, with all the rest of the profits going out of state.
Harrah’s, one of the largest casino corporations in the world, owns the Paducah racetrack, a fourth of the Franklin track (Kentucky Downs) near Nashville, and a third of Turfway near Cincinnati. Harrah’s is poised to make billions from casinos in Kentucky. Another 71% of the Kentucky Downs is owned by Nashville billionaire Brad Kelley. We would be foolish to think Harrah’s and Kelley plan to leave the money here.
The gambling industry is not bringing the money home now, will not bring it home if they get casinos, and will levy a massive hit on Kentucky businesses that we simply cannot afford. Bringing the money home is a sham, a shameless sham being perpetrated on the people of our Commonwealth by the Casinocrats, candidates who haven’t even bothered to study the issue and other states’ experience with it before using expanded gambling as a foundation of their campaigns. Don’t be fooled by the Shameless.
