Citing the crisis confronting the horseracing industry, Kentucky Governor Steve Beshear has released details of his proposal to authorize the limited use of Video Lottery Terminals (VLTs) at Kentucky horseracing tracks.
“Kentucky’s signature horseracing industry is in a state of crisis,” Governor Beshear said. “I believe my proposal will help level the playing field for Kentucky’s horse industry and help retain the 100,000 jobs and USD4bn economic impact that Kentucky enjoys as a result of horseracing. It will also, ultimately, help generate some much-needed funds for the state during these difficult economic times.”
A significant portion of the revenue generated by VLTs would go to support equine interests, including 14.5% of net terminal revenue, which would be used for the enhancement of thoroughbred, standardbred and quarter horse equine interests through purse supplements and other incentives. 1% of net terminal revenue would go to the Equine Breed Authority, which would be established to promote non-racing breeds and economic development opportunities within the equine industry.
Each track facility would pay an initial application fee of USD25,000, plus additional license fees that would generate USD360m for the state’s General Fund. Licensing would be for 10 years, with subsequent five year renewals. By 2010, taxpayers would save an estimated USD30m through tax reductions associated with the income tax credit for state property taxes on cars, the active duty military pay income tax exemption, and sales tax exemptions for the equine industry.
Under Beshear’s proposal, VLTs would be administered and regulated by the Kentucky Lottery Corporation at approved tracks licensed by the Kentucky Horse Racing Authority. After initial implementation costs, the Lottery Corporation will be allocated up to USD2m annually for the administration and oversight of VLTs.
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