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The Sonic Boom of Session 2024: Kentucky Overhauls Horse Racing and Gaming Oversight
by SKO Government Relations | June 2024
Boom! You know, like a sunny day on the beach when you haven’t even heard the F‑16 coming and then, literally, “out of a clear blue sky” comes the sonic boom.
It’s day 50 of the first Session in several years that hasn’t included a major piece of legislation impacting Kentucky’s signature horse industry. Historical horse racing – done. Grey machines legislation – done. Sports betting – done. To be sure, a few bills are in the mill and a few other ideas bouncing around, but nothing that would move the needle in a big way.
Then, Senate Majority Leader Damon Thayer drops a floor amendment on SB 3, an act that in its original form would have attached the Fish and Wildlife Commission to the Commissioner of Agriculture instead of the Public Protection Cabinet. Thayer’s amendment would have done the same thing with the Racing Commission. The full Senate passes the bill, with the Thayer amendment attached, but it never makes it anywhere in the House. It turns out, though, that this is just a preview of coming attractions.
On day 52 of the Session, the word gets out that Speaker Osborne has a different idea of what should happen with the Racing Commission, as well as all legal forms of wagering (i.e., sports wagering, charitable gaming) in Kentucky other than the state lottery. And his model is the state lottery itself – specifically the Kentucky Lottery Corporation. Over the next few days, the bill is crafted, drafted, revised, attached on Day 55 of the Session to SB 229 (a shell bill filed 13 days earlier by none other than Senator Thayer), heard in an almost-unprecedented Joint House and Senate Committee meeting, and passed by both Chambers.
Governor Beshear vetoes it, as expected. The Republican super majorities in both Houses override the veto as, expected. And just like that, barring litigation and the entry of an injunction, on July 1, 2024: the Board of the Kentucky Racing Commission will become the governing Board of the Kentucky Horse Racing and Gaming Corporation; the Executive Director of the Racing Commission will become the President of the corporation; and all powers and duties formerly exercised by the Commission will fall under the purview of the Corporation.
Charitable gaming will be folded in under the Corporation a year later – July 1, 2025. Current Racing Commission members will remain in place as corporate Board members, and the Executive Director will continue as corporate President, for two years. After that, new Board members will be chosen by the Governor to fill designated slots (e.g., Thoroughbred representative, Standardbred representative, charitable gaming representative, gaming expert).
Now what? The scramble is on. Two and a half months is not much time to cut the umbilical cord between Public Protection and the Racing Commission. And it is beginning to appear that there are more things the Cabinet was doing for the Commission, and therefore a lot more to transition, than was anticipated.
The good news is that for the first year of its existence, the Corporation will essentially be the Racing Commission in a different form: largely run by the same people, doing the same jobs, regulating the same licensees who will be conducting the same operations under the same statutes as before. It will have more autonomy than before, especially regarding hiring and compensation of employees, but to the public and the regulated entities should look much the same.
Except . . . early indications are that it could cost more. If existing statutes are not modified, the added costs will be divvied up and allocated to the tracks on top of significantly increased Racing Commission assessments and new HISA fees in recent years. There is also close to a 100% probability there will be unintended consequences flowing from the new Act. Anything this complex, done this quickly, in the crucible at the end of a legislative session virtually guarantees it.
This brings us to the final bit of good news. There is a scant six months between the effective date of the “new order” and the next legislative session. Plus, the biggest changes won’t occur until charitable gaming comes over a year later and the new Board takes over two years later. There will be plenty of opportunity early on for the General Assembly to address issues that arise and, at least at this point, there seems to be plenty of legislative will to make it all work.
It’s day 50 of the first Session in several years that hasn’t included a major piece of legislation impacting Kentucky’s signature horse industry. Historical horse racing – done. Grey machines legislation – done. Sports betting – done. To be sure, a few bills are in the mill and a few other ideas bouncing around, but nothing that would move the needle in a big way.
Then, Senate Majority Leader Damon Thayer drops a floor amendment on SB 3, an act that in its original form would have attached the Fish and Wildlife Commission to the Commissioner of Agriculture instead of the Public Protection Cabinet. Thayer’s amendment would have done the same thing with the Racing Commission. The full Senate passes the bill, with the Thayer amendment attached, but it never makes it anywhere in the House. It turns out, though, that this is just a preview of coming attractions.
On day 52 of the Session, the word gets out that Speaker Osborne has a different idea of what should happen with the Racing Commission, as well as all legal forms of wagering (i.e., sports wagering, charitable gaming) in Kentucky other than the state lottery. And his model is the state lottery itself – specifically the Kentucky Lottery Corporation. Over the next few days, the bill is crafted, drafted, revised, attached on Day 55 of the Session to SB 229 (a shell bill filed 13 days earlier by none other than Senator Thayer), heard in an almost-unprecedented Joint House and Senate Committee meeting, and passed by both Chambers.
Governor Beshear vetoes it, as expected. The Republican super majorities in both Houses override the veto as, expected. And just like that, barring litigation and the entry of an injunction, on July 1, 2024: the Board of the Kentucky Racing Commission will become the governing Board of the Kentucky Horse Racing and Gaming Corporation; the Executive Director of the Racing Commission will become the President of the corporation; and all powers and duties formerly exercised by the Commission will fall under the purview of the Corporation.
Charitable gaming will be folded in under the Corporation a year later – July 1, 2025. Current Racing Commission members will remain in place as corporate Board members, and the Executive Director will continue as corporate President, for two years. After that, new Board members will be chosen by the Governor to fill designated slots (e.g., Thoroughbred representative, Standardbred representative, charitable gaming representative, gaming expert).
Now what? The scramble is on. Two and a half months is not much time to cut the umbilical cord between Public Protection and the Racing Commission. And it is beginning to appear that there are more things the Cabinet was doing for the Commission, and therefore a lot more to transition, than was anticipated.
The good news is that for the first year of its existence, the Corporation will essentially be the Racing Commission in a different form: largely run by the same people, doing the same jobs, regulating the same licensees who will be conducting the same operations under the same statutes as before. It will have more autonomy than before, especially regarding hiring and compensation of employees, but to the public and the regulated entities should look much the same.
Except . . . early indications are that it could cost more. If existing statutes are not modified, the added costs will be divvied up and allocated to the tracks on top of significantly increased Racing Commission assessments and new HISA fees in recent years. There is also close to a 100% probability there will be unintended consequences flowing from the new Act. Anything this complex, done this quickly, in the crucible at the end of a legislative session virtually guarantees it.
This brings us to the final bit of good news. There is a scant six months between the effective date of the “new order” and the next legislative session. Plus, the biggest changes won’t occur until charitable gaming comes over a year later and the new Board takes over two years later. There will be plenty of opportunity early on for the General Assembly to address issues that arise and, at least at this point, there seems to be plenty of legislative will to make it all work.
The Increasing Significance of Interim Sessions in the Kentucky General Assembly
by SKO Government Relations | June 2024
In recent years, the interim sessions of the General Assembly in Kentucky have become increasingly significant. Traditionally, these sessions have addressed important topics, but in the modern legislative era, they have become crucial in shaping future legislation. As such, if an idea or matter is not discussed during these interim sessions, it becomes very challenging to capture the attention of legislators and bill drafters during the regular meetings of the General Assembly. To be sure, there are a few notable exceptions (see “Boom!” below), but these are increasingly rare and require a hefty push by leadership of both chambers.
Legislative Calendar
The Kentucky General Assembly operates on a biennial schedule with distinct differences between even and odd years. In even years, the Legislature meets for 60 days starting in early January and concluding by mid-April, with a strict deadline of April 15. In odd years, like the upcoming 2025, the session is shorter, lasting 45 days, and must adjourn sine die by March 30, as mandated by the Kentucky Constitution.
May: A Crucial Month
For legislators, May can be a period of respite or a time of intense activity, particularly during election years, as primaries have become increasingly costly and time-consuming. For lobbyists, organizations, Legislative Research Commission (LRC) staff, May serves as a crucial time for strategic planning and preparation for the upcoming interim meetings.
The Interim Session: June to November
The period from June through November, known as the Interim Session, is crucial. Many issues with substantial merit and political will do not get passed during the regular session due to time constraints for studying the matter, gathering research, crafting legislation, whipping votes, passing the bill through committees, securing passing in both chambers, and working with the executive branch to prevent a veto. The Interim session provides an opportunity to address these issues, allowing for thorough study and preparation for success in the next regular session starting in January.
Types of Interim Session Meetings
Interim Joint Committee (IJC) Meetings. These traditional meetings combine Standing Committees from the Senate and House to ensure continuity of study and action between sessions. Chaired alternately by respective chamber chairpersons, IJCs cover a wide range of topics, including Appropriations & Revenue, Banking & Insurance, Economic Development and Workforce Investment, Education, Judiciary, Licensing, Occupations & Administrative Regulations, Local Government, Natural Resources & Energy, and Transportation.
Statutory Committees: Authorized by the Kentucky Revised Statutes or functioning as subcommittees of the LRC, these committees include the Administrative Regulation Review Subcommittee, Capital Projects and Bond Oversight Committee, Commission on Race & Access to Opportunity, Consensus Forecasting Group, Government Contract Review Committee, Legislative Oversight & Investigations Committee, Public Pension Oversight Board, and Tobacco Settlement Agreement Fund Oversight Committee.
Legislative Task Forces: These special committees or subcommittees focus on specific, targeted issues, producing detailed reports with findings from their monthly meetings. Recent task forces have addressed Jail & Corrections Reform, Multimodal Freight Transportation System Improvement, Local Government Annexation, Certificate of Need, and School & Campus Security.
The 2024 interim session will be particularly impactful, with fall elections for the entire Kentucky House of Representatives (100 seats) and half of the Kentucky State Senate (19 seats). Additionally, national races will have implications for the Bluegrass State. Given the ongoing legislative schedule, it is crucial for businesses and organizations to have representatives with strong ties to Frankfort, KY, to monitor and engage in these off-session functions.
Conclusion
The evolving legislative landscape in Kentucky underscores the importance of staying engaged year-round. At SKO-GOV, we are proud to maintain our offices in historic downtown Frankfort, ensuring we are always at the heart of legislative action, tracking and influencing developments that impact our clients and the broader community.
Legislative Calendar
The Kentucky General Assembly operates on a biennial schedule with distinct differences between even and odd years. In even years, the Legislature meets for 60 days starting in early January and concluding by mid-April, with a strict deadline of April 15. In odd years, like the upcoming 2025, the session is shorter, lasting 45 days, and must adjourn sine die by March 30, as mandated by the Kentucky Constitution.
May: A Crucial Month
For legislators, May can be a period of respite or a time of intense activity, particularly during election years, as primaries have become increasingly costly and time-consuming. For lobbyists, organizations, Legislative Research Commission (LRC) staff, May serves as a crucial time for strategic planning and preparation for the upcoming interim meetings.
The Interim Session: June to November
The period from June through November, known as the Interim Session, is crucial. Many issues with substantial merit and political will do not get passed during the regular session due to time constraints for studying the matter, gathering research, crafting legislation, whipping votes, passing the bill through committees, securing passing in both chambers, and working with the executive branch to prevent a veto. The Interim session provides an opportunity to address these issues, allowing for thorough study and preparation for success in the next regular session starting in January.
Types of Interim Session Meetings
Interim Joint Committee (IJC) Meetings. These traditional meetings combine Standing Committees from the Senate and House to ensure continuity of study and action between sessions. Chaired alternately by respective chamber chairpersons, IJCs cover a wide range of topics, including Appropriations & Revenue, Banking & Insurance, Economic Development and Workforce Investment, Education, Judiciary, Licensing, Occupations & Administrative Regulations, Local Government, Natural Resources & Energy, and Transportation.
Statutory Committees: Authorized by the Kentucky Revised Statutes or functioning as subcommittees of the LRC, these committees include the Administrative Regulation Review Subcommittee, Capital Projects and Bond Oversight Committee, Commission on Race & Access to Opportunity, Consensus Forecasting Group, Government Contract Review Committee, Legislative Oversight & Investigations Committee, Public Pension Oversight Board, and Tobacco Settlement Agreement Fund Oversight Committee.
Legislative Task Forces: These special committees or subcommittees focus on specific, targeted issues, producing detailed reports with findings from their monthly meetings. Recent task forces have addressed Jail & Corrections Reform, Multimodal Freight Transportation System Improvement, Local Government Annexation, Certificate of Need, and School & Campus Security.
The 2024 interim session will be particularly impactful, with fall elections for the entire Kentucky House of Representatives (100 seats) and half of the Kentucky State Senate (19 seats). Additionally, national races will have implications for the Bluegrass State. Given the ongoing legislative schedule, it is crucial for businesses and organizations to have representatives with strong ties to Frankfort, KY, to monitor and engage in these off-session functions.
Conclusion
The evolving legislative landscape in Kentucky underscores the importance of staying engaged year-round. At SKO-GOV, we are proud to maintain our offices in historic downtown Frankfort, ensuring we are always at the heart of legislative action, tracking and influencing developments that impact our clients and the broader community.
Stoll Keenon Ogden PLLC Launches SKO-Government Relations Firm in Frankfort
by Stoll Keenon Ogden PLLC | December 2022
Stoll Keenon Ogden PLLC is excited to announce a new service to serve its clients better — SKO-GOV. The new entity extends the firm’s services to include consulting and lobbying for both the Legislative and Executive branches. “The launch of SKO-GOV will not only allow SKO to expand the government relations advice it has been offering clients for more than a century, but it will also provide our clients the convenience of expanded government relations services,” according to SKO Managing Director P. Douglas Barr.
“Our firm has a long history of active engagement in political and governmental affairs, with a number of our attorneys having served in the Kentucky General Assembly and in key executive branch positions,” stated Bill Lear, a former 5-term Kentucky State Representative. “In addition, we have done considerable work over the years as Legislative and Executive branch counsel, advising clients on the legal consequences of various bills, amendments, and proposed administrative regulations. SKO-GOV represents an important expansion of that work.” SKO Frankfort Member Paul Harnice added, “As SKO grows, we continue to look for ways to serve our clients better. What better way than to provide them with the additional services they need from a team they know and trust.”
Operating from Stoll Keenon Ogden’s Frankfort, Kentucky office, SKO-GOV will focus on the full range of clients’ governmental needs, employing an individualized approach based on each organization’s goals and objectives. The SKO-GOV team will work closely with its clients to develop the best roadmap to ensure that client voices are heard by the legislative and executive branches at the local, state, and levels.
“We are committed to the growth of our clients and our community and value the role that government relations bring to continuing the trajectory of success for the organizations we serve and the state we call home,” said Barr.
“Our firm has a long history of active engagement in political and governmental affairs, with a number of our attorneys having served in the Kentucky General Assembly and in key executive branch positions,” stated Bill Lear, a former 5-term Kentucky State Representative. “In addition, we have done considerable work over the years as Legislative and Executive branch counsel, advising clients on the legal consequences of various bills, amendments, and proposed administrative regulations. SKO-GOV represents an important expansion of that work.” SKO Frankfort Member Paul Harnice added, “As SKO grows, we continue to look for ways to serve our clients better. What better way than to provide them with the additional services they need from a team they know and trust.”
Operating from Stoll Keenon Ogden’s Frankfort, Kentucky office, SKO-GOV will focus on the full range of clients’ governmental needs, employing an individualized approach based on each organization’s goals and objectives. The SKO-GOV team will work closely with its clients to develop the best roadmap to ensure that client voices are heard by the legislative and executive branches at the local, state, and levels.
“We are committed to the growth of our clients and our community and value the role that government relations bring to continuing the trajectory of success for the organizations we serve and the state we call home,” said Barr.
