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A
I
need
someone
from
staff
to
run
down
to
education
and
tell
timony
and
mccoy
to
get
up
here
we're
going
to
pass
over
their
bills
if
everyone
could
silence
their
cell
phones.
If
you
are
interested
in
testifying,
please
use
the
signing
in
sheet.
Testimony
is
within
the
chair's
discretion
and
is
based
on
time
constraints.
A
A
A
Are
there
any
introductions?
I
have
a
special
friend
ken
lewis
in
the
audience
who
I'd
like
to
introduce.
Thank
you
for
being
here
ken
any
other
introductions.
A
A
A
C
C
Mr
chairman
and
committee,
thank
you
for
allowing
me
to
bring
forward
this
important
piece
of
legislation
today
back
during
the
interim,
the
joint
committee
for
lno
met
to
discuss
gray
machines
that
infiltrated
every
county
in
the
commonwealth.
It
was
the
result
of
that
meeting
that
provided
the
genesis
for
this
bill.
E
Yes,
thank
you
and
thank
you
so
much
for
giving
me
the
opportunity
to
speak
today.
The
kentucky
lottery
supports
house
bill
608,
because
there
is
so
much
at
stake
for
us
here
and
by
us
I
don't
mean
just
the
kentucky
lottery,
I
mean
the
kentucky
lottery
and
the
commonwealth
we're
one
in
the
same.
The
lottery
is
not
a
for-profit
private
enterprise.
The
lottery
was
created
for
you,
the
general
assembly
to
fund
college
scholarships
for
our
kentucky
college
students
and
last
fiscal
year.
We
sent
you
354
million
dollars
for
this
purpose.
E
You
should
have
recently
received
our
annual
letter,
which
sets
out
a
couple
of
really
important
facts
for
you.
This
is
a
letter
that
not
only
sets
out
the
amount
that
your
college
students
have
received
in
your
jurisdiction,
but
also
the
universities
that
ultimately
receive
these
funds
we've.
Given
the
state
record
returns
in
17
of
the
past
22
years.
Your
expectations
of
us
are
high
and
they
should
be.
E
If
action
is
not
taken,
since
I
was
just
here
testifying
in
november.
Only
four
months
ago,
gray
machines
have
increased
42
percent
in
lottery
retail
locations
across
the
state,
and
now
there
are
1
602
machines
in
436
retailers
in
76
counties,
and
we
know
there
are
far
more
in
other
types
of
establishment,
and
just
since
this
bill
was
in
front
of
the
house
licensing
and
occupation
committee
last
week
we
have
counted
100
more
machines.
E
What
exactly
is
the
impact
of
all
these
machines
on
the
lottery?
It's
early,
I've
always
said
so,
but
already
it's
significant
and
it's
because
of
where
the
machines
are
located.
We
face
competition
from
all
other
forms
of
gambling,
both
legal
and
illegal,
but
these
machines
have
landed
right
in
lottery
locations,
convenience
stores,
gas
stations,
grey
machines,
target
those
same
locations
and
others,
and
that's
why
unregulated
gaming
machines
are
a
massive
blow
to
lottery
and
just
to
be
clear,
the
ga,
the
gray
machines
are
not
hr.
E
E
E
Do
the
same
comparison
for
the
entire
state.
Sales
are
up
6.4,
so
estimated
loss
sales
year
to
date
in
laurel
over
400
000.
estimated
lost
sales
annually
over
800
000,
and
if
we
apply
these
estimated
lost
annual
sales
to
the
state
using
our
population
of
4.5
million,
we
stand
to
lose
almost
60
million
in
sales
annually.
If
the
machines
proliferate
like
they
have
in
laurel
county.
If
nothing
is
done
to
stop
the
gray
machines,
it's
a
green
light
for
gray
machines
and
then
what
happens?
We
don't
need
a
crystal
ball.
E
E
It
had
15
500
machines
in
pennsylvania
and
has
stated
that
it
plans
to
have
40
000
machines
in
pennsylvania
by
2023,
and
they
are
only
one
of
nine
manufacturers
of
these
machines
in
pennsylvania
in
the
entire
u.s.
In
the
last
quarter,
only
four
lotteries
posted
negative
growth
in
scratch-off
sales.
Pennsylvania
was
one
of
them.
Now,
let's
bring
the
focus
back
home,
though
our
number
one
sales
rep
last
year.
His
name
is
mr
michael
hayden
out
of
owensboro.
E
He
is
now
dead.
Last
in
our
western
region,
in
september,
michael
had
only
three
retailers
with
gray
machines.
In
november
the
davis
county
attorney
said
he
would
not
pursue
legal
action
against
these
machines
and
since
then,
the
number
of
machines
has
skyrocketed,
38
retailers
with
107
machines
and
more
at
non-lottery
locations
at
michael's,
top
kino
retailer
kino
sales
were
down
80
percent
from
last
year,
scratch-off
sales
down
27
percent.
At
one
location,
michael's
retailer
is
making
four
thousand
dollars
a
month
on
the
grey
machines
and
those
sales
are
climbing.
However,
lottery
sales
have
declined.
E
36
percent,
since
getting
these
machines,
the
retailer
explained
that
he
makes
a
much
higher
profit
on
the
machines
because
he
doesn't
have
to
claim
it
on
his
taxes.
It
gets
to
keep
approximately
40
percent
of
the
gross
profit.
A
similar
story
is
playing
out
all
across
the
state.
We've
had
retailers
say,
move
this
lottery
equipment
to
make
room
for
the
gray
machines
and
we've
had
lot
we've.
Had
our
retailers
tell
us
to
take
the
lottery
out
completely.
We
have
to
have
this
room
for
gray
machines.
E
E
Why
is
this
happening,
because
the
machines
obviously
make
a
lot
of
money,
and
there
are
no
rules
to
follow.
Legal
gaming
cannot
compete
with
that,
but
for
now
we
need
to
clear
up
a
few
things.
We've
been
hearing
some
mighty
tall
tales
floating
around
out
there
about
what
house
bill.
608
is
or
isn't
what
the
lottery's
planning
and
plotting
to
do
and
going
to
do
has
done
and
I'll
just
say
that
I've
been
coming
down
here
and
testifying
in
front
of
this
body
for
about
18
years
now,
and
I'll
continue
to
do
that.
E
I'll
continue
to
give
you
the
best
information,
the
best
advice
that
we
have
to
help
you
make
decisions,
we've
heard
from
the
grey
machine
manufacturers,
tax,
regulate
tax
and
regulators,
but
this
is
not
the
way
to
implement
expanded
gaming.
First,
stop
the
out
of
control
proliferation
of
the
gray
machines
then
carefully,
consider
whether
to
tax
and
regulate.
This
is
because
to
be
effective.
Regulation
of
expanded
gaming
requires
tough
decisions,
be
made
before
implementation
and
not
after
like.
Where
will
the
machines
be
located?
E
Will
cash
payout
be
allowed,
as
is
currently
the
case,
who
will
ensure
that
the
tight
controls
and
continuous
monitoring
enforcement
is
in
place
to
ensure
compliance
and
protection
regulation
can
take
at
least
a
year
to
implement
and
requires
costly,
centralized
systems,
hiring
and
funding
of
an
enforcement
division
and
other
administrative
staff
attempting
to
tax
and
regulate
many
different
machines
and
games
already
in
operation
everywhere?
Robs
you
of
your
ability
to
develop
a
plan
that
puts
public
policy
and.
A
E
Yes,
sir,
of
course
I
would
like
to
clear
up
one
particular
point.
This
point
is
especially
important:
hb
608
does
not
expand
the
authority
of
the
lottery
or
any
other
league
legal
gaming.
In
any
way,
the
lottery
isn't
going
to
do.
One
thing
differently
because
of
608
we
operate
within
the
parameters
of
154a
and
608
does
nothing
to
change
our
statute.
E
608
is
very
simple.
It
just
says
that
gaming,
that
is
authorized
by
the
general
assembly,
which
is
lottery
pair,
mutual
racing
and
charitable,
are
legal,
and
if
you're,
gambling
and
you're
not
one
of
these
three,
you
are
gambling
illegally.
This
does
away
with
the
argument
that,
if
it's
gray,
it
must
be
okay
and
I'll
just
say.
C
Mr
chairman,
I'll
I'll
wrap
up
very
briefly.
Thank
you.
I
I
think
it's
worth
noting
that
any
established
policy
involving
gaming
in
kentucky
has
a
very
has
been
vetted
very
thoroughly
and
if
you
peruse
238
you'll
see
that
we
even
give
specific
directions
for
peace
officers,
ending
facilities
of
gaming
facilities,
the
lottery
has
the
has
the
transparency
involved
requiring
that
we
require
for
it
to
be
at
the
table
with
us.
C
Mr
chairman,
we
have
gaming
options
in
kentucky
that
have
gone
by
the
rules
that
have
followed
that
have
come
to
this
body,
and
these
grey
machines
have
not.
We
need
to
establish
a
starting
point
with
that
discussion.
If
that's
something
that
the
commonwealth
wants,
we
need
to
be
the
ones
that
lead
the
way
with
that
structure.
Thank
you.
Yeah
thank.
A
You
for
your
testimony,
it's
a
little
bit
after
quarter
after
we
have
numerous
questions,
people
that
want
questions
that
we're
going
to
do
that
for
15,
minutes,
questions
and
answers,
and
then
we
will
move
on
to
the
other
side
of
this
issue.
First
is
a
senator
adams.
F
F
C
Start
with
the
second
part
of
your
question,
ma'am,
the
second
part,
no,
no
part
of
this
bill
talks
about
what
things
would
look
like
moving
forward.
If
we're
going
to
integrate
them.
The
the
only
purpose
of
this
bill
is
to
remove
them.
Okay
and
the
the
we
have
walked
this
path.
F
The
you
know,
I'm
sure,
we've
all
on,
as
members
of
this
committee
have
been
contacted
by
our
small
bars
and
our
small.
You
know,
restaurants,
that
you
know
are
really
reliant
on
these,
but
at
the
same
time
you
know
you
have
to
think
about.
Did
you
go
through
the
regular
process
that
everybody
else
did?
So
this
is
a
tough
one,
but
I
just
wanted
to
get
some
insight
into
what
that
task
force.
G
Thank
you,
mr
chairman.
Just
a
couple
questions
and
reading
the
bill
or
anything
it
it
doesn't
say
anything.
Will
this
in
any
way
regulate
what
goes
on
at
county
fairs,
state
fairs
carnivals
those
type
of
things.
C
G
At
those
carnivals,
in
other
events,.
C
G
Just
one
other
comment:
some
of
your
newer
machines
look
just
like
slot
machines
and
stuff
too,
is
that
just
a
way
to
try
to
garner
support,
rather
than
let
some
of
these
others
come
in.
I
mean
you
know
you
all
are
expanded
to
different
types
of
games
to
the
internet
and
a
lot
of
things
all
the
time
to
garner
more
support.
E
We
do
have
some
gaming,
we
have
vending
machines,
not
gaming
machines.
C
And
we
have,
we
do
currently
have
a
statute.
Krs154A063
lottery
shall
not
operate,
approve
and
operate
any
casino
or
similar
gambling
gaming
devices.
H
H
H
They
were
passed
by
the
general
assembly
and
they're
regulated
by
various
regulatory
bodies
that
we
spend
a
lot
of
money
to
make
sure
that
they
have
the
tools
to
properly
regulate
it
and
they
should
be
regulated
all
thr
and
and
by
the
way
the
lottery
not
only
was
supported
by
the
legislature,
but
it
was.
It
was
put
on
the
ballot
by
the
legislature
and
then
passed
by
the
vote
of
the
people
on
a
constitutional
amendment.
H
All
three
serve
higher
purposes.
Charitable
gaming
obviously
serves
the
charities
and
raises
money
for
the
charities
that
are
legally
participating
in
those
games.
Paramutual
waging
supports
our
signature
horse
racing
industry
and
is
making
a
larger
every
year
contribution
to
the
general
fund
and,
of
course,
mary
you've
made
a
great
case
for
how
the
lottery
supports
education,
which
was
the
original
purpose
of
the
constitution.
H
No
I'm
just
making
my
strong
support
for
the
bill,
and
I
want
to
make
a
point
that
these
gray
machines
came
into
kentucky
with
either
no
legal
opinion
or
a
legal
opinion
paid
for
by
an
attorney
hired
by
those
promoting
the
games
and
now
they've
gotten
caught
and
they're.
Saying
we'll
tax
us
and
regulate
us
and
I'm
not
for
rewarding
that
bad
behavior.
Thank.
A
I
Mcdaniel,
thank
you,
mr
chairman,
guys
in
in
running
through
this
walk
me
over
to
page
two.
What
what
is
something
of
value.
C
For
the
purpose
of
this
bill,
it
would
be
monetary
value.
I
Just
just
we
can
pin
that
mary
when,
when
the
when
you
guys
started,
I
lottery,
did
the
general
assembly
authorize
that.
E
I
E
It's
true
that
our
board
moved
us
to
move
ahead
with
internet
sales
in
keno
as
well,
both
of
which
we
believed
were
under
authorized
under
our
current
statute.
That
happened.
E
I
E
E
We
did
not
ask
for
any
any
legislative
action
so.
I
Why
do
why,
in
paragraph
b
page
two
gambling
shall
not
include
if
everything's
already
defined
under
statute
already
tell
me
what
new
games
do
you
anticipate
as
a
result
of
getting
this
bill
passed?
What's
the
kentucky
lottery
going
to
add
to
its
offerings.
I
E
I
The
point
of
the
bill,
or
that
section
becomes
unnecessary,
so
I
just
have
some
concerns
there
and
then,
if
I
flip
over
to
page
five
profiting
from
gambling
activity.
This
deals
like
with
the
bar
owner
and
stuff,
like
that.
I
I
become
concerned
because
you
make
some
adjustments
to
paragraph
nine
and
I
guess
I'm
directing
this
to
representative
timoney
here.
You
know.
I
become
concerned
that
if
you
do
get
involved
in
you
know
you
have
a
game
there
and
let's
say
that
you've
got
a
pool
table
and
and
got
and
people
are,
you
know
you
got
to
put
little
coins
in
to
do
it
and
people
are
gambling
on
that.
You
know
they
bet
each
other
stuff.
I
I
mean
not
that
anybody
would
ever
bet
each
somebody
for
something
in
a
bar,
but
it
could
happen
theoretically.
Theoretically,
I've
heard
rumors
about
certain
ones
in
savannah
and
charleston,
but
nonetheless,
and
the
owner
of
the
establishment
is
receiving
some
kind
of
a
rent
royalty
profit
sharing
from
the
fact
that
a
coin
operated
pool
table's
in
his
joint
all
of
a
sudden.
I
see
them
potentially
being
caught
up
under
this
as
under
the
definition
of
profiting
from
gambling
activity.
I'd
like
you
to
talk
to
that.
C
Well,
I
I
do
believe
in
in
that
particular
example.
If
someone
was
wagering
over
a
pool
game
that
that
would
not
cost
that
wouldn't
fall
under
any
provision
of
this
bill.
So
therefore
that
would
be
considered
illegal
gambling,
so
they
would
not
be
caught
up
under
that
owner
of
a
pool
table
where
you
would
put
your
coins
into
play.
You
would
not
be
held
liable
under
that,
because
that
is
not
considered
a
gaming
device,
and
I
I
see
I
see
where
you're
going
with
that,
but
I
I
don't
neces.
C
I
Timoney
is
a
man
of
good
will.
I
don't
think
you
you
bring
this
with
malice.
I
hope
those
who
are
here
on
both
sides
will
recognize
that
we
simply
find
ourselves
on
different
sides
of
an
issue
on
this
one,
but
I
don't
think
that
there's
a
particular
malice-
and
I
certainly
just
wanted
to
acknowledge
that
in
front
of
the
room.
Thank
you,
mr
chairman.
A
You're
welcome.
Okay,
we've
reached
the
end
of
our
questions
with
this
group.
So
let's
and
it's
the
timing's
perfect
exactly
28
after
so,
let's
bring
the
opposition
up
and
see
what
they
have
to
say.
A
And
we
will
designate
15
minutes
for
your
presentation
and
be
keep
in
mind.
That's
all
the
presenters
together
15
minutes
and
then
we'll
go
to
questions.
We
have
another
important
bill
after
this
one.
So
welcome
you're,
no
stranger
to
this
committee,
introduce
yourself
for
the
record
and
proceed.
D
Thank
you,
mr
chairman,
members
of
the
committee,
I'm
bob
hellranger,
I'm
an
attorney
in
louisville
kentucky
and
it's
my
privilege
and
honor
to
represent
the
prominent
technologies
company
owners
of
the
wildcat
skill
games
that
you
may
have
seen
and
referred
to
in
the
press.
I'm
I
have
with
me
rajon
patel,
who
is
the
director
company
director
of
marketing
and
steve
o'daniel
who's
our
compliance
officer.
D
D
I've
been
here
since
1977
in
one
capacity
or
another,
I've
worked
on
the
senate
republican
staff
right
out
of
law
school
back.
Then
we
had
eight
senators
and
a
staff
of
five.
I
then
got
elected
to
the
house
served
23
years
there.