POLITICS AND MONEY - A VOLATILE MIX

29 February 2008

Land casino operator defends contributions to Kentucky politician


A political row is gaining momentum in the US state of Kentucky over a $1 million "contribution" by a land casino owner to a political group that worked to elect a pro-gambling governor in Kentucky, reports Associated Press this weekend.

The casino owner, William Yung III, has essentially placed a huge bet that newly elected Governor Steve Beshear will be able to get the state's long-standing prohibition against casinos lifted, the article claims.

Yung has been forthright about his contribution: "I make no apologies for helping get Steve Beshear elected," he told The Associated Press in an interview. "I've got a First Amendment right to spend my money any way I want to spend it."

Governor Beshear is proposing an amendment to the state constitution that would allow up to seven casinos to be built at Kentucky horse tracks and five others in communities along the state's borders with Indiana, Ohio, Tennessee and West Virginia.

That many casinos, he said, could generate $600 million a year in tax revenue for a cash-strapped state government.

The proposal is a long shot in a Bible-belt state where lawmakers have rejected numerous other casino proposals over the past decade. If it passes, Yung would open a casino on a northern Kentucky site he bought just last month for $7 million.

"Absolutely, we're gambling on it," Yung said. "We don't know if it's going to pass or not."

Yung's $1 million contribution went to the Kentucky political group Bluegrass Freedom Fund that ran devastating television ads capitalising on the former governor's legal woes. Internal Revenue Service records show Yung's contribution accounted for a third of the $3 million the group spent during the Governor Beshear's race for the governor's mansion.

"I have done absolutely nothing wrong. Steve Beshear's done nothing wrong. Nobody associated with us has done anything wrong," he said. "It's just pretty sickening politics."

Yung's generosity included a $10 000 donation to help pay for Beshear's inaugural party on the Capitol grounds. Casino opponents claim he is using his riches to buy his way into a new and potentially lucrative market.

Political contributions of $1 million or more are becoming common in state-level elections, said Rachel Weiss, spokeswoman for the National Institute on Money in State Politics.

Beshear, who raised and spent about $6.8 million on his campaign last year against former Governor Ernie Fletcher, insists Yung's contributions bought him no favours. Yung would have to apply for a casino license just like anyone else, Beshear said.

"It would be naive for anybody to believe that a $1 million contribution to a fund that helped elect a pro-casino governor is not going to position the contributor in a favorable way," said John Mark Hack, head of the antigambling group Say No To Casinos.

After Beshear took office in December, Yung's privately held company, Columbia Sussex, paid $7 million for a site in northern Kentucky to build a casino. Yung called the property "prime real estate" that he can easily resell if Beshear's casino proposal flops.

Yung's company owns 13 casinos and 80 hotels in the United States and beyond, pulling in revenues of some $3 billion a year.

Governor Beshear had made legalising casinos a centrepiece of his campaign against former Governor Ernie Fletcher, a Republican who had been weakened by political scandal. Beshear pulled off a lopsided victory, and claimed it reflected broad-based support for legalising casinos.

Casino opponents, however, say Beshear's victory was the result of distaste for Fletcher, who, along with 13 associates, was indicted in 2006 for alleged violations of state hiring laws. Fletcher pardoned his associates and reached a deal with prosecutors to have the charges against him dropped.

"Donald Duck could have run against Ernie Fletcher and been elected governor," Hack said.

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