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From YouTube: House Standing Committee on Licensing, Occupations, & Administrative Regulations (3-16-22)
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A
Everyone
can
take
their
sheep.
Overflow
room
is
149
with
extra
seating.
If
anybody
wants
to
go
in
there
and
view
the
meeting,
I
ask
you
to
please
silence
your
cell
phones.
If
you're
interested
in
testifying,
please
use
the
sign
in
sheet
located
in
the
back
of
the
room
by
the
door.
Testimony
is,
is
going
to
be
with
the
chairs
discretion,
based
on
our
time
constraints
and
information
that
has
already
been
presented
and
as
just
as
a
reminder,
no
signs
are
permitted
in
the
committee
rooms.
B
C
A
E
As
long-time
members
of
this
committee
know,
we've
passed
it
out
of
this
committee
a
few
times
in
the
past,
and
I
think
we're
in
in
position
hopefully
to
have
better
luck
going
forward
out
of
this
committee.
But
what
this
essentially
does
is,
as
you've
seen,
is
allow
for
wagering
on
sports,
as
happens
in
33
other
states
and
the
district
of
columbia
notion
on
sub
there.
There
is
no
sub.
A
G
The
family
foundation's
opposition
to
the
expansion
of
gambling
is
is
well
known
to
this
committee
and
its
members.
But
an
issue
of
this
magnitude
and
importance
requires
that.
I
briefly
lay
out
once
again
some
of
our
concerns
predatory
gambling,
especially
in
the
expansive
form
that
is
being
considered
this
morning
in
house
bill.
606
is
not
a
victimless
form
of
entertainment
or
competition.
G
G
The
fact
that
this
committee
is
also
considering
other
bills,
including
609,
which
would
establish
a
fund
with
millions
of
dollars
to
help
deal
with
the
problems
caused
by
gambling,
is
further
evidence
that
even
advocates
for
the
expansion
of
gambling
understand
that
there
will
be
victims
and
destruction
to
families
and
communities
across
our
commonwealth,
more
broken
families,
increased
divorce
and
untold
additional
social
costs.
I
would
urge
members
of
this
committee
and
the
general
assembly
to
just
consider
a
few
additional
questions
and
thoughts.
G
G
One
of
the
main
purposes
of
government
is
to
seek
the
welfare
of
its
citizens
not
to
exploit
those
who
are
vulnerable.
Government-Sponsored
expansion
of
gambling
by
its
nature
is
bad
government
and
bad
policy.
I
would
urge
you
and
your
fellow
members
of
the
general
assembly
to
oppose
the
expansion
of
predatory
gambling
and
the
harm
that
it
would
cause
kentucky
families.
Thank
you.
D
D
Well,
606.,
one
of
the
things
I
always
hear
is
kentucky
is
not
first
on
doing
different
things
like
they
people
say
when
it
comes
to
these
this
issue.
How
come
we
weren't
the
first
ones
to
do
it?
Well,
why
shouldn't?
Why
can't
kentucky
take
a
different
tune
and
say
we're
going
to
be
the
first
to
stand
up
and
say
no
to
issues
like
this.
D
E
F
E
There
is
no
question
that
there
are
costs
and
we'll
talk
about
that
when
we
get
to
609,
but
those
costs
exist
now,
there's
billions
being
wagered
currently
legally
in
the
state
on
various
forms
of
gaming.
There
are,
according
to
the
american
gaming
association,
there's
two
billion
dollars
wagered
illegally
on
sports
in
kentucky
every
year,
and
I
think
it's
important
to
bring
those
people
out
of
the
shadows
to
dry
up
the
the
black
market
and
make
sure
that
the
people
of
the
state
have
the
benefits
of
their
government
protecting
them.
E
When
you
go
to
a
bookie
and
if
you
have
a
good
weekend
and
you
go
to
collect
and
your
bookie
doesn't
want
to
pay
you,
where
do
you
go?
What
recourse
you
have?
The
answer
is
none.
If
that's
the
case,
if
and
when
we
legalize
it,
that
won't
be
the
case.
You'll
have
a
a
government
who
will
intervene
on
your
behalf
and
make
sure
that
things
are
being
taken
care
of
properly
so
and
I
can
go
on
and
on.
A
D
H
H
D
H
A
E
E
A
E
A
Here,
would
you
like
a
let's
go
ahead
and
do
the
motion
on
the
committee
sub?
Yes,
we
do
have
a
committee
sub.
We
have
a
motion
by
representative
timonies
or
a
second
second
by
representative
mccoy,
all
those
in
favor
signify
by
saying
aye
aye,
all
opposed,
nay
motion
carries
committee
subs
now
on
the
table,
all.
E
Right,
thank
you
I
like,
as
if
I
know
what
I'm
doing
created
a
powerpoint
for
today's
paramutual
modernization
and,
first
of
all,
I
want
to
acknowledge
again,
representative
gentry
and
representative
cook
who
were
on
the
perimeter.
Modernization
task
force
that
took
place
over
the
summer-
and
this
is
this
bill-
is
the
result
of
that
task
force
co-chaired
by
senator
thayer,
and
we
had
five
really
good
meetings.
I
appreciate
leadership
offering
us
the
opportunity
on
both
sides
to
take
a
deep
dive
into
the
paramutual
system.
E
There's
a
lot
of
arcane
old
rules
that
we're
gonna
update
and
obviously
it's
genesis
came
from
a
desire
to
increase
general
fund
monies
from
historical
horse
racing,
so
we're
going
to
do
it,
but
in
not
the
exactly
the
direct
way
that
was
anticipated.
So
this
is
kind
of
the
simple
breakdown
of
what
house
bill.
607
does
current,
so
we're
going
to
tax
every
paramutual
wager
at
one
and
a
half
percent.
E
I
was
here
a
few
of
us
were
here
when
we
set
up
the
adw
advanced
deposit
wagering,
and
that
was
done
largely
by
representative
gentry's
predecessor,
representative
clark,
and
it
was
a
fledgling
industry.
Then
well,
it's
it's
not
a
fledgling
industry.
Now,
that's
where
I
think
a
majority
of
the
bets
are
made.
E
So
we
changed
the
distribution
of
live
and
hhr
taxes
to
direct
more
money
to
the
general
fund,
and
I
think
I've
got
a
slide
that
gets
into
that.
In
a
little
bit
we
send
money
to
university
of
kentucky
and
bctcs
equine
industry
programs.
We
currently
send
money
to
the
louisville
program
and
we
we
add
those
two
programs
because
they're
currently
doing
the
work
and
they're
not
getting
direct
funding.
E
That's
back
in
the
day
when
that
was
the
only
place
where
you
could
legally
wager
in
kentucky,
and
so
you
got
tickets
and
you
showed
up
and
there
were
turnstiles
and
that
may
make
sense
for
a
couple
tracks.
But
at
turfway
I've
never
gone
through
a
turn
style
turf
way,
and
I
don't
think
they're
gonna
have
them
in
the
new
facility
same
with
kentucky
down
same
with
ellis
park
same
with
red
mile,
so
they've
been
just
kind
of
estimating
how
many
people
come
in
and
then
they
send
the
state
money.
E
I
think
in
2020
fiscal
year
it
was
150
000.
So
it's
not
a
lot
of
money.
We're
going
to
eliminate
that
includes
language
to
require
that
the
racing
commission
be
self-funding.
We've
been
spending
money
for
years
on
their
funding
and
they're
going
to.
We
have
enough
of
the
hhr
machines
now
that
they
can
put
a
fee
on
there
and
they
can
be
self-sufficient,
requires
operators
to
maintain
a
self-exclusion
list
and
share
that
list
with
the
racing
commission
for
other
operators
to
use.
So
what
is
that
that
is
you're?
E
Someone
you've
you've
been
going
you
you
know.
Maybe
you
have
a
a
problem.
Maybe
you
you
just
want
to
take
a
week
or
two
off
and
you
say:
don't
let
me
in
here
for
a
week,
don't
let
me
in
here
for
a
month,
don't
let
me
in
here
for
a
year
whatever
it
may
be.
This
is
I
I'd,
say
common,
if
not
standard
practice
with
casinos
across
the
country,
and
it's
not
something
that's
done
here
in
kentucky
and
and
we're
gonna
require
that
it
that
be
done.
E
We
also
are
going
to
require
that
they
share
the
list
with
the
racing
commission.
So
that
other
tracks
have
access
to
it
and
they
can
also
make
sure
that,
if
you're
in,
if
you
go
to
red
mile
and
say,
don't
let
me
in-
and
you
find
yourself
in
louisville-
and
you
get
the
itch
that-
hopefully
they
will
have
that
list
and
they
will
keep
you
from
going
in
there
in
louisville
as
well.
E
It
eliminates
breakage
which
we
will
get
to,
but
it's
a
very
exciting
issue
and
it
allows
thoroughbred
development
funds
to
be
used
for
claiming
races.
Currently,
we
hear
about
all
the
the
great
purses
in
kentucky
and
and
what
has
the
improvements
that
hhr
has
brought
to
them,
but
those
are
only
for
the
top
level
races.
E
E
So
what
we're
going
to
do?
Is
we
cap
the
monies
for
the
third
red
development
fund
at
40
million
dollars?
And
when
I
say
I
shouldn't
say
cap
at
but
when
the
third
red
development
fund
hits
40
million
dollars
in
a
year
and
last
year
it
hit
38
something
and
the
standard
bred
development
fund
gets
to
20
million,
and
I
think
last
year
was
11
million.
E
The
rate
that,
where
you
fill
up
those
funds
will
go
down.
Okay,
by
more
than
half
we'll
still
put
more
money
into
them,
but
instead
we
will
take
in
the
case
of
the
third
red
development
fund,
four
tenths
of
a
percent
and
in
the
case
of
the
standard
development
fund
0.65
and
that
money
will
start
going
to
the
general
fund
instead
of
those
development
funds.
E
So
we
believe
that
in
two
or
three
years,
when
the
historical
horse
racing
facilities
are
more
mature,
we're
looking
at
20
million
dollars
additional
in
the
general
fund,
the
increase
in
the
adw
tax
from
one
half
to
one
and
a
half
percent
will
immediately
generate
four
million
a
year
and,
as
I've
mentioned,
that's
the
growth
area.
So
that
will
continue
to
go
up
over
time
and
requiring
the
racing
commission
to
be
self-sustaining.
E
This
27
million
dollars
and
the
money
I
discussed
in
the
last
slide
is
on
top
of
the
additional
monies
that
are
being
generated,
that
even
if
we
do
nothing,
those
monies
have
gone
up.
As
you
can
see
on
this
slide
quite
a
bit,
20
21
was
41
million
dollars,
which
was
more
than
the
previous
two
years
combined
this
year.
The
the
estimate
is
six.
I
put
down
62,
it's
actually
62.7
million,
it
may
come
in
a
little.
E
E
Lines
were
deep,
easier
to
pay
out
that
way,
and-
and
my
guess
is,
it
was
actually
there-
weren't
computers
figuring
out
in
a
tote
system,
figuring
out
what
the
odds
were
in
real
time.
There's
people,
probably
behind
the
scenes,
counting
up
money,
trying
to
figure
out
what
the
payout
would
be,
how
much
was
placed
on
every
horse
so
and
but
it's
just
something-
that's
never
been
changed.
E
E
We,
you
know
the
the
horse
owners,
the
the
trainers,
the
jockeys
everyone
everyone's
getting
healthy
on
on
this,
except
for
the
bettors,
and
this
is
how
we're
going
to
help
the
bettors
is
they're
going
to
get
paid
to
the
penny
rather
than
every
20
cents,
and
it's
it
will.
In
addition
to
taking
care
of
the
betters,
it
will
make
kentucky
the
place
in
north
america
to
wager
if
you're
someone
who
wages
a
lot
of
money,
do
it
for
a
living.
Do
it
for
entertainment
whatever
it
is.
E
Why
would
you
bet
anyplace
else?
Why
would
you
bet
someplace
when
you're
going
to
get
paid
780
when
you
can
get
paid
7.96
and
we
and
our
resident
experts
here,
pat
cummings
in
in
the
audience?
If
anybody
wants
to
ask
questions
about
it,
but
you
know
when
it
is
especially
noticeable
when
you
have
like
a
big
favorite
who's,
paying
280
to
win
you're,
getting
80
cents
back
on
your
two
dollars.
E
I
E
E
Now
that
62
is
what
is,
I
mean
that
one
1.5
you
can
see
goes
.75
to
the
development
fund
and
point
to
the
equine
industry
program
and
stuff
so
that
that's
not
the
whole
one
and
a
half
percent.
It's
it's
a
small
sliver
of
it,
which
is
why
we're
we're
capping
and
saying
once
you
hit
this,
then
we're
going
to
start
sending
more
of
it
to
the
general
fund.
H
Before
I
ask
a
question,
I'd
like
to
to
make
a
complimentary
statement,
first
of
all,
of
the
hard
work
of
yourself
and
and
task
force
and
and
there's
something
that
you
didn't
mention,
I
think,
is
really
really
important
in
this
bill
and
a
lot
of
our
tax
revenues
go
to
the
kentucky.
Thoroughbred
racing
fund
actually
standard
bread
racing
fund
as
well,
which
is
very,
very
vitally
important
to
the
breeding
industry
and
racing
industry.
Here
in
the
state
and.
H
Lower
income
operations
are
in
this
type
of
racing
and
before
the
claiming
races
were
not
eligible
for
purse
supplements
this
bill
will,
since
we
now
have
the
the
funding
with
within
the
fund.
To
do
this,
we
are
adding
claiming
races
to
those
purse
supplements
for
kentucky
breads,
and
this
is
this
is
very,
very
important
and
I
think
it's
one
of
the
one
of
the
big
pieces
of
the
bill-
and
I
just
wanted
to
mention
that.
Thank.
E
H
In
committee,
we
heard
testimony
from
the
university
of
louisville,
which
runs
an
our
equine
industry
program.
It's
one
of
the
programs
that
that
gets
funded
back
in
the
1980s.
This
program
was
created
and
it
survives
and
is
fully
funded
by
tax
revenues
that
come
from
paramutual
wagering
and
most
of
the
para
mutual
wagering
revenues.
Today,
over
80
percent
come
from
hhr.
H
H
The
revenues
that
go
to
the
equine
industry
program
are
capped
out
of
hhr
because
they
also
get
revenues
out
of
two
other
pair
mutual
platforms.
One
simulcasting
one
live
racing
in
both
of
those
platforms,
live
racing
and
simulcasting
has
been
declining
in
recent
years.
We're
going
to
hire
technology
to
adw,
which
is
betting
on
your
phone
and
betting
on
on
your
computer
internet
wagering,
the
university
of
louisville
equine
program
gets
no
money
from
that.
H
So
what
is
happening
is
their
hhr.
Funds
are
capped
and
their
simulcasting
and
live
racing
funds
are
declining.
So,
even
though
we
are
exploding
in
revenues
because
of
all
the
growth
in
hhr,
the
university
of
louisville
equine
programs.
Revenues
are
going
down
for
five
years
in
a
row,
and
the
sponsor
has
been
nice
enough
to
to
talk
to
me
about
addressing
that
issue,
and
I
hope
those
talks
continue.
As
we
go
to
the
floor.
H
I
totally
support
this
bill,
but
I
think
we
need
to
do
something
about
that
and
and
stop
that
declining
trend,
because
they're
they're.
This
is
a
very
successful
program
and
now
they're
looking
at
possible
cuts
moving
forward,
and
we
need
to
stop
that
because
the
money's
there
and
I've
just
asked
the
question,
would
you
be
willing
to
continue
to
talk
about
this
situation?
Of
course,
thank
you.
A
E
Currently,
only
the
university
of
louisville
one
is
funded.
Obviously
we're
we're
directing
monies
from
hhr
to
those
two
specific
ones.
The
uk
and
bctcs
they've
been
funding
them
themselves,
but
obviously
it's
a
workforce
issue
everyone's
having
it,
and
I
think
it's
a
good
idea
to
go
forward.
If
there
are
others,
I'm
not
aware
of
them.
They
probably
exist
and
I'm
happy
to
listen
to
folks
in
the
interim
and
if
there's
more,
that
want
to
come
and
make
the
the
ask
and
show
their
worth
we're
happy
to
to
consider
that.
A
B
A
H
H
A
F
K
A
E
E
E
There's
no
requirements
in
any
way
shape
or
form
for
any
of
the
operators
to
engage
in
this.
I
saw
this
as
an
opportunity
and
and
mr
stone
from
kentucky
council
on
problem.
Gaming
actually
gave
us
this
idea,
which
was
what
better
use
of
this
money
than
to
address
our
problem
gaming
and
responsible
gaming
issues.
E
E
This
is
a
big
ask
of
a
fair
amount
of
money,
but
if
this
passes
in
its
current
form
and
if
managed
properly,
it
should
take
care
of
kentucky's
needs
in
this
regard,
maybe
in
perpetuity,
if
not,
you
know
it
will
be
hundreds
of
years.
None
of
us
will
be
here.
None
of
us
will
get
a
credit
for
next
time.
It
needs
to
be
refilled,
for
it
I
mean.
Maybe
representative
birch
would
still
be
here,
but
I.
E
E
I
did
thank
you.
I
do
want
to
just
say
that
I
made
sure
that
there
was
an
appointee
from
both
the
house
and
the
senate
so
that
it
provides
some
level
of
legislative
oversight
and
certainly
they
have
to
provide
reports
to
committees
and
as
as
long
as
I
get
to
be
chairman
of
this
committee,
we'll
we'll
be
hearing
from
them
on
a
regular
basis
to
see
how
their
progress
is
going.
So.
A
D
D
E
A
F
H
H
I
also
acknowledge
the
problem
with
a
small
percentage
of
those
who
participate
in
addicted
gambling.
It
is
a
real
problem.
This
bill
fixes
the
most
glaring
weakness
in
our
state
that
we
do
not
set
aside,
have
not
set
aside
funds
for
kentucky
problem
gaming
to
give
those
individuals
the
services
they
need.
K
E
E
K
K
K
Those
of
you
who
are
not
don't
have
those
memorized,
that's
charitable
gaming
lottery
and
the
horse
racing
second
thing
it
does.
Is
it
authorizes
the
kentucky
state
police
to
establish
a
task
force
dedicated
to
removing
gambling
devices
not
authorized
by
law,
and
the
last
thing
it
does?
Is
it
directs
the
justice
and
public
safety
cabinet
to
promulgate
regulations
regarding
the
task
force.
C
C
What
exactly
is
at
stake
for
the
kentucky
lottery
and
the
commonwealth,
because
we're
one
and
the
same
right?
We
are
not
a
for-profit
private
enterprise.
The
kentucky
lottery
was
created
by
the
general
assembly
to
fund
college
scholarships
for
kentucky
college
students
and
last
fiscal
year
we
sent
you
over
354
million
dollars
for
this
purpose.
Kentucky
families
depend
on
us
to
fund
an
extensive
list
of
merit-based
and
need-based
college
scholarships,
including
the
popular
key
scholarship
program
and
we've
provided
over
4
billion
dollars
to
scholarships
to
date.
C
C
Since
I
was
here
in
november,
testifying
before
you
it's
only
four
months
ago,
gray
machines
have
increased
42
percent.
In
lottery
retail
locations
all
across
our
state,
and
now
we
have
1504
machines
in
397,
lottery,
retailers
in
72
counties
and
far
more
of
the
machines
and
other
types
of
establishments
like
bars
and
social
establishments.
C
C
We
face
competition
from
all
forms
of
gambling,
legal
and
illegal,
but
these
machines
have
landed
right
in
lottery
locations,
which
is
convenience
stores
and
gas
stations,
gray
machines
target
those
very
same
locations,
and
that
is
why
unregulated
gaming
machines
are
a
massive
body
blow
to
the
kentucky
lottery.
But
let's
look
at
the
numbers
at
the
end
of
quarter,
two,
we
looked
at
our
statewide
lottery.
Sales
stores,
with
the
gray
machines
are
lagging
behind
the
others
about
5.5
percent.
But
let's
look
a
little
closely
at
accounting.
C
We're
looking
at
laurel
county
in
particular
because
laurel
county
is
number
one
in
the
state
as
far
as
concentration
of
these
machines
with
193
gray
machines,
that's
one
machine
for
every
316
people
in
laurel
county
and
that's
more
machines
or
almost
as
many
machines
as
we
have
in
jefferson
county
now,
the
year
to
date,
sales
for
fy22
compared
to
the
year-to-date
sales
in
fy21
sales
are
flat
in
laurel
county.
Do
the
same
comparison
with
the
entire
state
and
sales
are
up.
C
6.4
percent
estimated
lost
sales
year-to-date
in
laurel
is
over
four
hundred
thousand
dollars
estimated
lost
annual
sales
that
we're
going
to
have
in
laurel
county
over
800
thousand
dollars.
If
we
apply
these
estimated
lost
annual
sales
to
the
entire
state,
using
our
population
of
4.5
million,
we
will
stand
to
lose
almost
60
million
annually
in
lottery
sales.
If
the
gray
machines
proliferate
all
across
the
state
as
they
have
done
in
laurel
county,
if
nothing
is
done
to
stop
the
gray
machines,
it
is
a
green
light
for
the
gray
machines
and
then
what
happens?
C
We
don't
need
a
crystal
ball
to
find
out.
Only
look
to
some
of
the
other
states
that
have
had
this
happen.
Pennsylvania
is
one
of
them.
The
numbers
of
machines
in
pennsylvania
have
exploded,
pesomatics
said
2015.
They
had
only
322
machines,
but
by
2019
they
had
15
500
machines,
and
it
has
announced
plans
to
have
over
40
000
machines
in
pennsylvania
by
2023,
and
they
are
only
one
of
nine
manufacturers
of
these
machines
in
pennsylvania.
C
C
Now
mr
hayden
is
dead
last
in
the
western
region
in
september,
here's
michael's
story
only
three
of
his
retailers
had
gray
machines,
but
in
november
the
davies
county
attorney
district
attorney
said
that
he
would
not
pursue
legal
action
against
the
machines
and
now,
since
january,
the
number
of
machines
in
that
area
has
skyrocketed,
38
retailers
with
107
machines
and
more
at
non-lottery
location
at
michael's,
top
kino
retailer
keno
sales
are
down
80
percent
from
last
year
and
scratch
off.
Sales
are
down
27
from
last
year.
C
At
one
location,
michael's,
retailers
making
4
thousand
a
month
on
the
gray
machines
and
those
sales
are
climbing,
but
lottery
sales
have
declined.
36
percent
since
getting
machines
the
retailer
explained
he
is
making
a
much
higher
profit
on
the
machines
because
he
doesn't
have
to
claim
his
taxes.
He
keeps
approximately
40
percent
of
the
gross
profit
and
a
similar
story
is
playing
out
for
us
all
across
the
state
we
have
had
retailers
move
our
equipment
over
to
make
room
for
the
gray
machines
we
have
had
retailers
tell
us
take
out
this
lottery
entirely.
C
We
need
it
to
make
room
for
the
gray
machines.
We've
had
retailers
say
we
don't
want
the
gray
machines,
but
we
have
to
have
them
in
order
to
compete
with
the
store
down
the
street,
and
we
have
had
our
retailers
tell
us.
Do
not.
Please
do
not
make
us
choose
between
these
machines
and
the
lottery,
because
we
will
have
to
choose
these
machines.
Why
is
that?
Because
the
machines
make
more
money
and
there
are
no
rules
to
follow.
One
grey
machine
manufacturer
recently
said
to
the
courier
journal.
C
We
are
policing
ourselves,
so
how
is
that
working?
And
where
is
the
integrity?
What
is
the
age
limit?
Is
it
18
or
21,
because
we've
seen
both
on
those
machines
if
they
are
true
skill
gains?
Why
is
there
a
need
for
age
control?
What's
the
payout?
What's
the
process
for
player
complaints?
Where
are
the
rules
for
the
games
and
how
are
the
machines
operated?
Where
are
the
responsible
gaming
materials?
These
are
all
matters
of
integrity
that
the
players
take
for
granted
with
the
kentucky
lottery
and
the
other
forms
of
legal
and
authorized
gaming
in
kentucky.
C
But
that's
not
sure.
That's
not
the
case
for
unregulated
gaming
machines
and
legal
gaming
cannot
compete
with
that.
We've
heard
from
the
gray
machine
manufacturers
just
tax
and
regulate
just
tax
and
regulate
us,
but
that
is
not
the
way
to
implement
expanding
gaming.
These
machines
came
in
the
dead
of
the
night
and
they
set
up
shop
and
rewarding
this
bad
behavior
is
not
that
the
answer
to
the
problem
that
they
have
created.
C
If
you
throw
a
party,
you
normally
want
to
be
the
one
to
determine
the
guest
list
rather
than
cater
to
your
crashers.
Expanded
gaming
should
be
done
from
the
top
down
instead
of
the
bottom
up,
where
we
have
to
cobble
together
a
patchwork
quilt
of
inconsistencies
and
irregularity,
it's
not
the
way
to
implement
expanded
gaming.
So,
in
conclusion,
it
is
absolutely
up
to
you,
the
general
assembly,
to
decide
what
kind
of
expanding
gaming
that
we
will
have
in
the
commonwealth.
C
L
Good
morning
again,
mr
chairman
and
members
of
the
committee,
my
name
is
madge
vale
I
serve,
as
vice
president
of
compliance
and
regulatory
affairs
for
lancaster
bingo
company.
Lancaster
bingo
company
is
a
licensed
supplier
of
charitable
gaming
products
here
in
kentucky,
and
also
in
seven
other
markets.
Seven
other
states
and
we've
been
here
in
kentucky
since
1994..
L
My
company,
lancaster
bingo,
is
headquartered
in
lancaster,
ohio.
We
have
a
warehouse
and
warehouse
staff
here
in
louisville
and
sales
reps
are
located
throughout
the
commonwealth.
Thank
you
again
for
the
opportunity
to
testify
in
support
of
house
bill
60608
and
the
clarification
it
brings
that
skill
gaming
in
kentucky
is
not
legal.
I
would
just
want
to
make
three
main
points.
L
L
As
a
result,
the
skill
gaming
industry
eventually
moved
out
of
ohio,
but
it
did
it
did
so
without
not
without
leaving
a
mark
on
charitable
gaming,
as
gross
receipts
at
this
time
had
dropped
to
less
than
700
million
more
than
half
of
what
they
were
10
years
later
or
10
years
earlier.
Sorry,
to
give
you
some
comparison.
Charitable
gaming
gross
revenues
in
kentucky
in
2019
skipping
2020
due
to
the
pandemic
and
also
2021,
is
not
yet
published.
Yet
these
receipts
in
kentucky
were
over.
L
489
million
should
kentucky
experience,
similar
taxes
and
charitable
gaming
revenues,
as
ohio
would
mean
a
reduction
of
over
200
million
and
will
put
at
risk
those
dollars
currently
used
to
support
charitable
causes.
Like
veterans,
clubs,
fraternal
halls,
high
school
booster
clubs,
humane
societies,
churches
volunteer,
fire
departments
to
name
a
few
of
the
types
of
organizations
and
community
needs
served
as
a
result
of
charitable
gaming.
L
We
know
this
is
happening
and
it
is
very
attractive
to
the
charitable
licensee,
unlike
what
they
are
required
to
do
as
a
charitable
gaming
licensee.
If
they
decide
to
use
skill,
there
is
no
license
to
obtain
no
fees
to
be
paid
on
their
gross
receipts
from
gaming,
which
is
typically
thousands
of
dollars.
L
L
Charitable
gaming
has
always
been
considered
a
privilege,
a
way
of
raising
money
by
a
limited
number
of
organizations
by
virtue
of
state
rules
and
irs
limitations,
charitable
gaming
and
gambling
as
a
whole
when
conducted
lawfully,
is
a
complicated
endeavor.
It's
a
cash
industry
and,
as
a
result,
it
lends
itself
to
increased
levels
of
criminal
activity
as
a
result
and
as
a
way
to
help
reduce
these
risks
and
provide
sound
public
policy
and
protections.
L
L
In
addition,
if
the
organization
holds
a
liquor
license,
kentucky
provides
revised
statutes
state
that
setting
up
operating
keeping
a
gambling
game
device
or
machine
on
an
abc
licensed
premise
is
grounds
for
revocation
of
that
alcoholic
beverage
license.
This
issue
has
not
been
vetted
and
puts
charitable
organizations
conducting
skill
games
at
risk
of
losing
their
liquor
license
again.
Public
policy
protects
against
the
expansion
of
unregulated
gambling
by
restricting
of
other
privileges
to
those
who
are
not
in
compliance.
L
K
Mr
chairman
and
committee,
I,
after
hearing
the
expert
with
expert
testimony
from
both
of
my
guests
today,
I
think
it's
it's
beyond
discussion
that
we
need
to
proceed
cautiously
with
anything
that's
outside
of
what
we
currently
are
already
regulating.
Mr
chairman,
you
asked
a
very
poignant
question
to
a
representative
of
gaming
company.
During
the
interim
you
asked
about
what
their
end
objective
was.
K
Their
answer
was
to
be
legislated
into
law,
and
then
you
followed
with
well.
Why
didn't
you
start
there
and
I
think,
that's
very,
very
important
because,
mr
chairman,
we
are
starting
there
with
this.
We
are
asking
for
this
bill
for
all
the
charitable
gaming
companies
who
we
had
to
provide
temporary
statute
relief
last
year
due
to
the
pandemic
charitable
gaming
organizations
that
stretch
the
four
corners
of
the
commonwealth,
whitley
county,
touchdown
club,
the
liberty,
nature
and
raptor
center,
the
owensboro
eagles,
the
villa
hill
civic
club,
shirley's
way
in
louisville.
K
K
K
E
E
I
K
E
E
M
E
F
I
I
I
I
In
addition
to
kentucky,
we
currently
legally
operate
in
multiple
states,
including
pennsylvania,
kansas,
texas,
missouri,
illinois
and
new
york,
and
we
are
fully
regulated
operating
in
wyoming,
georgia
and
the
district
of
columbia.
We
are
software
companies
specializing
in
skill
games.
Our
business
model
is
disruptive
in
that
it
focuses
on
providing
sustainable
and
supplemental
income
to
small
businesses.
I
I
So
let
me
point
out
a
couple
things
by
sustainable
I
mean
that
we
focus
on
legal
entry
and
long-term
relationships
with
our
distribution
chain
and
the
local
and
state
officials
to
which
we
hope
to
regulate
sometime
in
the
future.
Supplemental
income
to
us
means
is
key
because
to
sign
up
with
pasomatic.
We
cannot
be
your
primary
source
of
income
in
states
where
we
operate,
we're
structured
to
self-police
our
distribution
chain.
I
We
execute
contracts
with
a
state
distributor
who
is
then
charged
with
executing
contracts
with
operators,
which
are
the
corn
machine
operators
that
usually
distribute
everything
from
atms
to
dart
boards
to
jukeboxes.
They
then
contract
with
locations
and
those
contracts
have
very
specific
rules
in
them
we
employ.
We
employ
a
compliance
team
of
retired
and
former
police
officers
to
enforce
those
agreements.
I
As
a
result
of
our
self-policing
and
compliance
team,
we
have
terminated
a
number
of
operators
in
many
different
jurisdictions
for
non-performance.
We
have
also
terminated
locations
for
failure
to
follow
our
contracts
in
most
states
that
we
go
into.
There
is
no
regulation.
We
have
to
self-regulate,
although
we
are
legal,
we
self-regulate
our
own
system
to
make
sure
that
everyone
stays
in
compliance.
I
We
also
provide,
as
part
of
our
compliance
team
and
to
law
enforcement
details
of
illegal
gambling
activity
in
multiple
states
and
help
them
act
upon
those
in
the
states
of
virginia
pennsylvania
and
others.
You'll
find
that
to
be
true,
and
we
can
hand
you
the
information
after
this
hearing,
if
you'd
like
to
find
out
in
our
structure,
this
is
key
pace.
Somatic
bears
the
cost
of
capitals
for
all
of
our
terminals
and
those
are
distributed
through
operators.
That
means
that
the
operators
don't
pay
for
the
terminals
locations,
don't
pay
for
the
terminals.
I
Pay
somatic
provides
those
terminals
on
a
cost-free
basis.
In
essence,
we
provide
a
win-win
opportunity
for
operators
and
locations.
We
invest
tens
of
millions
of
dollars
into
the
states
we
operate
because
we
provide
those
terminals
approximately
80
to
85
percent
of
the
money
generated
from
our
terminals
stays
in
the
state
where
it's
generated
so
here
in
kentucky.
That's
what
we
expect
to
see.
80-85
percent
of
the
money
generated
stays
in
the
state,
either
through
the
location
which
gets
40
or
the
operator
who
gets
35
percent
and
pesomatics.
Take
us
25
from
that
25
percent.
I
I
If
we've
seen
with
covet
and
the
current
rise
of
inflation
in
the
state
and
in
the
country,
our
games
are
a
lifeline
for
small
businesses,
pay
somatic
prides
itself
on
conducting
business
the
right
way
and
following
the
law,
we
will
not
place
our
games
in
a
market
without
getting
a
legal
opinion
on
our
software
to
determine
its
legality
in
a
market.
That's
a
lot
of
investment
for
us
to
go
in
and
take
a
legal
risk.
I
Before
entering
the
market,
we
received
a
legal
opinion
regarding
current
laws
from
one
of
the
commonwealth's
preeminent
gaming
experts,
laura
hollobeck
from
dinsmore
and
shull,
to
address
how
we
enter
this
market.
I
will
now
turn
to
john
tilly,
former
secretary
of
the
kentucky
justice
and
public
safety
cabinet
and
former
state
representative.
N
Thank
you
paul,
mr
chairman
and
members
of
committee.
I
don't
I
don't
take
this
assignment
lightly
and
I'll
tell
you
why
this
company
has
waited.
We
have
waited
four
months
to
set
the
record
straight.
What
I
mean
by
that
is
four
months
ago,
many
of
you
were
in
that
interim
joint
meeting,
where
you
heard
the
annual
report
from
the
kentucky
lottery.
N
N
Despite
whatever
ban
bill
you
may
pass,
that
is
a
fact.
The
legal
opinion
stands
by
itself
and
is
credible,
and
many
of
you
have
read
that
legal
opinion.
I
also
don't
take
this
assignment
lightly
because
I
was
the
plaintiff,
mr
chairman,
for
four
years
at
justice
and
prosecuted
that
case
against
poker
stars.
I
do
not
take
this
assignment
lightly.
Our
compliance
team
and
our
lawyers
are
spread
out
all
over
the
state.
Some
of
the
best
in
this
state
don't
take
that
lightly.
N
N
N
So
with
that,
I
have
to
also
address
one
other
inconsistency,
because
inconsistencies
and
patchwork
has
been
mentioned
today.
I
have
to
I
have
to
to
submit
to
you,
given
that
the
loudest
opposition
to
these
skill
games
has
been
the
lottery
I
would
have
to
submit
to
you
submit
consistencies
there.
So
let
me
take
a
moment
to
consider
a
question.
You
need
to
ask
yourselves.
N
Under
what
authority
is
the
kentucky
lotte
lottery
operating
kino
an
online
lottery
called
ilottery
and
I'll
tell
you
our
legal
team
looked
at
it
and
in
summary,
we
don't
believe
the
lottery
has
any
specific
authority,
and
I
don't
think
either
you
do
either
because
there's
legislative
history
to
this
point
to
operate
keno
or
I
lottery,
which,
by
the
way,
once
again
bypasses
small
business.
My
colleague
will
touch
on
just
how
badly
it
bypasses
small
business
and
they
seem
to
suggest
that
they
gain
whatever
authority.
N
They
have
from
an
oag
opinion
from
then
attorney
general
jack
conway,
which
granted
them
that
authority.
There
is
nothing
else.
There
was
a
2013
bill
which
maybe
some
of
you
in
the
room.
Some
of
my
colleagues
I
was
I
was
here
in
the
house
at
that
time.
I
voted
on
that
bill
to
allow
kino
sales.
Let
me
tell
you:
there
was
no
discussion
of
our
lottery
and
I
think
that's
key
because
of
the
nine
states.
This
cannot
be
overstated
either.
N
N
M
Okay,
maybe
two
all
right,
ladies
and
gentlemen,
so
why
are
we
here
and
why
now,
as
john
said,
grey
machines
have
been
in
the
commonwealth
for
15
or
20
years.
We
estimate
there's
15
to
20
000
of
them
here.
Presently,
if
you
ban
skill
games,
companies
like
paceo
mata
could
do
things
the
right
way.
They'll
leave
those
games
are
not
going
to
leave.
M
M
We
went
to
him
and
he
looked
at
the
lottery's
numbers
in
pennsylvania
and
he
and
if
you
guys
want
to
talk
to
him,
he
can
answer
questions.
Everyone
loves
to
talk
to
an
economics
professor
in
the
morning,
but
what
he
estimated
was
not
estimate.
What
he
showed
was
that
in
locations
where
the
lottery
and
games
of
skill
are
together,
the
lottery
actually
does
better
and
again.
The
pennsylvania
lottery
has
record
profits
and
chairman
koenig's
counterpart
in
pennsylvania
after
they,
the
lottery
testified
there
rebuked
the
lottery
for
using
those
numbers.
M
M
M
I
think
it's
going
to
add
another
27
million
dollars
to
the
general
fund,
pending
legislation
in
pennsylvania
right
now,
taxing
this
industry
at
16
would
give
the
general
fund
there
250
million
dollars
last
year
in
virginia
pacematic
alone,
gave
the
general
fund
140
million
dollars.
We
can
be
a
higher
purpose
as
well.
M
E
M
M
The
university
of
kentucky
has
built
a
program
around
esports
and
they're,
offering
1
000
prizes
to
students
on
their
esports
teams.
That's
a
game
of
skill.
We
believe
this
definition
of
game
of
skill
would
absolutely
ban
those.
There
are
178
universities
offering
esports
scholarships.
Currently,
why
do
we
want
to
lag
behind?
Why
do
we
want
to
take
that
away
from
us
and
then
one
little
point
to
the
end
of
the
bill
about
who
oversees
this?
M
M
M
Present
president
cyber
says
they
did
not
have
the
authority
to
do
it.
So
what
I
would
what
I
would
posit
is,
I
don't
think
they
have
the
authority
to
do
this
and
I'd
be
concerned
about
what
they
do
going
forward.
So,
finally,
I'll
end
with
a
couple
of
the
inconsistencies:
hhr
was
not
legal.
The
legislature
made
it
legal
ilottery
was
not
legal.
M
J
Chairman
koenig
members
of
the
committee,
it's
good
to
see
everybody
this
morning.
My
name
is
ryan
straugh,
I'm
the
vice
president
and
governmental
affairs
director
for
the
return
order
of
police.
I
come
forward
to
testify
with
these
gentlemen
in
opposition
of
house
bill
608,
which
makes
games
of
skill
illegal
in
our
commonwealth.
J
The
fraternal
order
of
police
are
proud
to
partner
with
east
coast
amusements
and
pay
somatic,
as
they
provide
much
needed
fundraising
opportunities
and
for
our
organization.
After
speaking,
with
many
private
attorneys
many
county
and
many
commonwealth's
attorneys.
We
believe
that
these
machines
are
legal
and
allowed
to
be
utilized
in
our
business
community.
J
J
The
funds
from
the
fop
also
sponsor
easter
seals.
It's
a
leading
non-profit
provider
of
services
for
individuals
with
autism,
developmental
physical
and
mental
disabilities
and
other
special
needs.
Easter
seals
services
benefit
children
and
adults
with
disabilities,
whether
diagnosed
at
birth
or
incurred
through
disease,
accidental
injury
or
the
aging
process,
as
well
as
their
families.
J
We
also
sponsor
special
olympics
through
our
law
enforcement
torch
run
and
we
also
fund
partly
the
national
veterans,
crisis
line
and
homeless
veterans
outreach
initiative.
These
are
just
a
few
of
the
things.
The
state
fop
helps
financially
support
and
can
do
so
because
of
the
fundraising
opportunities
these
companies
provide.
J
The
fop
is
dedicated
to
partnering
with
organizations
that
are
absolutely
law
abiding.
We
found
it
disingenuous
to
imply
that,
as
law
enforcement
professionals,
we
would
work
with
companies
that
do
not
obey
the
law.
To
this
end,
if
this
legislature
deems
these
to
be
unlawful,
we
will
ensure
these
machines
are
removed
immediately,
as
we
do
not
believe
these
are
truly
gray
machines,
as
they
are
being
called.
We
support
additional
regulations
and
taxes.
If
that's,
what
this
body
believes
is
fair
voting
o
on
house
bill.
J
E
E
E
The
the
legislature
set
the
tax
rate
for
it
at
one
point,
and
so
obviously
the
legislature
took
some
affirmative
action
in
that
regard.
It
was
a
ruling
about
regulations
rather
than
anything
else.
So
that
said
mr
hellringer
you're
going
to
get
your
time.
I
think
this
would
be
an
appropriate
time
for
representative
banta
to
make
her
motion.
Thank
you.
F
Thank
you,
mr
chairman,
glad
to
be
the
caboose
on
this
train.
The
I
represent
bob
hellringer
for
the
record.
I
represent
proudly
the
prominent
technologies
company.
We
have
the
wildcat
skill
games
that
you
may
have
seen
in
some
establishments
around
your
districts
and
your
counties.
I
want
to
say
a
few
words
about
permission,
which
you
just
touched
on
again.
F
F
Hence
the
term
gray
games.
We
joined
in
the
lottery's
request
for
an
opinion
from
the
attorney
general
when
that
looked
like
that
wasn't
forthcoming,
we
filed
a
declaratory
rights
action
in
the
franklin
circuit
court.
We're
asking
the
court
to
we
want
to
demonstrate
our
game
for
the
court.
We
we
feel
confident
that
when
that
happens,
it
was
supposed
to
happen
last
week,
but
the
judge
got
sick,
so
it's
probably
gonna
be
in
april,
but
the
the
when
we
display
our
games
to
the
the
court.
F
F
This
is
the
equivalent
of
lyft
and
uber
having
to
get
permission
from
the
yellow
cab
company
to
go
into
business
or
fedex
and
united
parcel
to
get
permission
from
the
post
office
and,
of
course,
none
of
those
permissions
would
be
forthcoming
under
those
hypotheticals,
but
only
we
are
singled
out
for
this.
The
committee
sub
the
lottery
people
came
up
here,
despite
being
up
every
year.
F
Nine
percent
last
year
we're
a
threat
and
it
looks
like
two
counties
I'd
like
to
see
all
the
counties
where
we
have
our
games
and
see
what
counties
where
the
the
lottery
is
up
over
the
previous
year.
Okay,
let's
see
the
whole
story,
we're
not
a
threat
to
the
lottery.
Nobody
seriously
believes
that
even
they
don't
believe
it,
they
called
us
an
existential
threat.
F
F
Okay
and
we're
not
there
weren't
any
regulations
in
effect,
but
nevertheless
we
comply
with
all
the
laws
in
all
the
counties
where
we
exist.
We
pay
occupational
taxes
in
a
lot
of
those
counties
and
we're
good
corporate
citizens.
In
a
lot
of
those
counties,
we
give
donations
to
the
tornado
relief
fund
and
the
counties
in
december
well
in
advance
of
the
beginning
of
this
session
or
or
the
introduction
of
house
bill
608.
F
So
they
say
we're
not
regulated.
Well,
the
committee
sub
that
representative
banta
has
will
take
care
of
that.
I'm
unaware
of
too
many
businesses
that
come
here
and
say.
Please
regulate
us.
Please
license
us,
please
tax
us!
Well,
that's
what
the
committee
sub
does.
It
doesn't
run
out
a
legitimate
business
in
the
state
that
has
come
in
here
and
has
invested
in
businesses
all
over
this
state
over
70
counties
it
will
regulate,
it
will
tax,
it
will
license
we'll
have
full
accountability
on
how
much
is
played.
How
much
is
given
back
to
the
winning
players?
F
How
many
games
are
at
each
location?
All
of
that
is
in
the
committee
sub.
The
net
revenue
15
tax
will
go
to
the
first
responders
professional
development
fund
that
is
established
in
the
committee
sub
a
most
worthy
cause.
We
believe
and-
and
we
allow
the
department
of
revenue
to
run
this
whole
enterprise.
So
there
you
have
the
regulation,
that's
the
way
we
need
to
go,
not
608,
which
is
strictly.
F
Let's,
let's
don't
beat
around
the
bush.
It's
a
protectionism
bill.
Okay
and
a
long
time
ago
I
was
where
you
were.
Okay,
I
sat
in
those
chairs.
I
had
the
same.
Stresses
and
and
pressure
and
listened
to
thousands
and
thousands
of
presentations
on
bills
and
608
is
the
kind
of
bill
representative
brancher
that
we
used
to
fight
okay,
it
it
picks
winners,
it
picks
losers.
F
It's
not
pro-business,
it's
not
pro-small
business,
it's
not
pro-free
enterprise
system,
it's
not
pro
freedom
and
that's
what
we
were
about
back
then-
and
I
know
that
you
are
here
today,
so
we
need
the
committee
sub.
It's
the
far
better
way
to
go
and
that's
what
they're
doing
in
pennsylvania.
They
forgot
to
tell
you
that
the
lottery
you
know
they
have
such
a
devastating
impact
on
the
pennsylvania
lottery.
Supposedly,
what's
pennsylvania
done,
they've
introduced
legislation
to
regulate
the
skill
games,
okay
and
to
tax
them
just
like
this
committee
sub
proposes.
F
So
I
strongly
urge
you
to
to
not
to
pass
608
in
its
current
form.
It's
got
lots
of
constitutional
issues.
I
don't
want
to
compare
my
legal
acumen
with
john
tilly,
but
I
agree
with
him
totally
that
there
are
serious
constitutional
issues
with
the
way
608
is
written.
The
far
better
way
to
go
is
to
welcome
this
investment
in
kentucky
to
thank
these
people
for
coming
into
our
state
and
investing
in
our
state
and
not
run
them
out
of
the
state.
Okay.
Thank
you
very
much,
mr
chairman.
H
H
H
H
E
B
A
H
Again,
I
apologize
that
I
couldn't
support
the
committee
sub.
My
no
vote
on
608
is
for
legalizing
regulating
and
taxing
this
industry,
but
we
need
to
do
it
the
right
way
and
it
needs
to
take
some
time.
So
I
would
hope
that
my
colleagues
would
would
help
stop
this
bill
on
the
floor
and
look
to
regulate
this
industry
in
the
future
in
a
logical
way
that
doesn't
harm
as
many
people
as
it
might.
Thank
you.