Foxes Guarding Hens

 On Aug. 21, a meeting was held in Frankfort to discuss the newest idea for solving the state’s financial problems. The Joint Interim Licensing and Occupations Committee took testimony on sports wagering legislation.

Unfortunately for supporters of this legislation, the testimony given by Vince Gabbert, Vice-President and Chief Operating Officer of Keeneland Race Track stated that the total revenue that could be expected for the state was $20 million. Now that sounds like a lot to you and me, but it is just a drop in the bucket in an annual state budget of over $11 BILLION. (Remember, one billion is 1000 millions.)

In fact, $20 million just covers the cost of one school building. Not two, not twenty.One. That’s it.

So, to say that bringing sports betting to the state is a way to address any significant state financial problem isn’t even remotely true.

One of the biggest problems with expanded gambling has always been the problem of corruption. When you have dealings with a big, wealthy, voracious industry, that’s to be expected. And the gambling industry is as big, wealthy, and voracious as they come.

And the thing about the gambling industry is that the corruption they bring arise seven before they get their legislation passed. In addition to the high-priced lobbyists they buy and the campaign contributions they make to lawmakers, to convince them to carry their water, there is the matter of how they try to get laws favorable to them passed.

Many people don’t remember the BOPTROT bribery scandal of the early 1990s that put a Speaker of the House in Jail, or that opponents of gambling can suddenly disappear from committees right before votes on gambling bills, as happened more recently.

But the peculiar form of corruption happening now is that, in order to pass gambling legislation, the gambling industry has convinced state lawmakers to completely ignore the state’s Constitution.

Kentucky’s Constitution allows only three forms of gambling: pari-mutuel wagering on horse racing, a state-run Lottery, and charitable gaming. Sports wagering doesn’t fit under any of these. If you want to have sports wagering in this state, you’ve got to pass a constitutional amendment. 

But when you point this out to the leaders of the movement to pass sports wagering, they just wave their hands and say that is not a problem. Why is it not a problem? They won’t say.

The only reason it’s “not a problem” is because some high-priced lobbyist in a tailored suit and alligator shoes told them it’s not. The Constitution itself, however, is fairly clear on the point.

Corruption follows the gambling industry around like a shadow, but it doesn’t only come from the outside. Sometimes, once it’s been set up, it starts to come from the inside.

At the August meeting, legislators discussed who would oversee sports gambling.The entity they want to oversee it is none other than the Horse Racing Commission.

This is the same state regulating body that is supposed to be overseeing the horse racing industry, but in fact has ceded its regulatory responsibilities to the entities they are supposed to be regulating.

The chairman of the Commission is a horse breeder. The vice chair is the former president of a racing park. Others are consultants, owners, officers and employees of horse farms or race tracks. Many of them stand to financially benefit from the decisions made by the Commission.

What other state commission allows the people it regulates to do the regulating?

Anyone who wants to know how the Commission operates need only read a recent story by the Kentucky Center for Investigative Reporting. The Center found that when an outside testing company was hired to assure that the “historic racing” machines(now populating several gambling parlors run by tracks) were on the up-and-up, the Commission “let the tracks themselves fund and oversee the consultant’s work.”

The commissioners are apparently very trusting people. In fact, they “didn’t even have copies of the invoices from New Jersey-based Gaming Laboratories International until it gathered them for the auditor.” (Almost $900,000.00)

“The industry that is supposed to be regulated is buying its own regulator,” one former U.S. Attorney told the Center.

Never have so many foxes been charged with guarding the same hen house.

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