How important financially is the racing industry to thestate of Kentucky?
It=s nearly a $3.4-billion industry overall. Equine sales
now exceed $1 billion annually; horses are our leading
agricultural product in the leading agricultural industry.
People know Kentucky as the horse capital of theworld.

TDN Q&A: GOVERNOR ERNIE FLETCHER
Kentucky Governor Ernie Fletcher, elected in 2003,
recently sat down for a phone interview with the TDN=s
Steve Sherack to discuss theRepublican=s support of thehorse industry and his stanceon gaming.
Governor Fletcher has createda $12-million Breeders=
Incentive Fund, which provides
funding to owners and breedersof Kentucky-breds. After lessthan a month on the job, the54-year-old abolished theKentucky Racing Commission
and replaced it with theKentucky Horse Racing
Authority. The KHRA was given Governor Ernie Fletcher
direction to govern and also
www.governor.ky.gov
promote the industry. Fletcher=sHouse Bill 350, which creates tax incentives, hashelped attract international horse racing events like the2010 Alltech World Equestrian Games to Kentucky.
Fletcher, born in Mount Sterling, Kentucky, graduatedfrom the University of Kentucky in 1974 with abachelor of science degree in engineering. Following
college, he served as afighter pilot in the UnitedStates Air Force. Fletcher
returned to school andreceived an M.D. degreefrom the University ofKentucky College ofMedicine, and practiced
as a family physician for
12 years. Fletcher served Sherack photo
one term on theKentucky House of Representatives in 1995 and waselected to the United States House of Representativesin 1998. He was re-elected in 2000 and 2002.
Growing up in Kentucky, what are some of your earliest
memories at the racetrack and how did you get
introduced to racing?
We used to go to both the Thoroughbred track andalso harness racing when we were younger. TheThoroughbred industry, Keeneland racetrack inparticular, has been a tradition in Kentucky for years. I
can remember, going back to my college days [at theUniversity of Kentucky in Lexington], when you used toget off early in the afternoon and go out to the races.
Keeneland has a wonderful tradition of horse racing.

Since becoming governor of Kentucky, what are someof your biggest contributions to the horse-racing
industry?
My work for the Thoroughbred industry, it goes backto congress. In 2002, I got the Rolapp Award forservice to the horse industry, and I was the one who
established the horse caucus in congress. We were
working on a number of pieces of legislation and we
felt like it was important to develop a caucus. And
that=s the reason why we won the Rolapp Award.
After becoming governor, I realized the racing
authority had a lot of concerns regarding integrity andcredibility, so within the first month, I re-organized theentire racing authority. It was called the RacingCommission. I made it the Horse Racing Authority andgave it a direction not only to govern, but also topromote the industry. When we came in, the executive
director was also a steward, so it was kind of a fox
guarding the hen house at that point. We developed agood stewards= program to make sure that it wasindependent. We additionally set about to reform drug
testing and raceday medication rules. I think we havesome of the best rules to provide integrity, which was aconcern for racing in Kentucky for many Thoroughbred
owners and individuals involved in the racing industry.
Additionally, with my Jobs For Kentucky Tax
Modernization Plan, we worked very strongly withSenator Damon Thayer, who=s worked very closely with
the Breeders= Cup and the Thoroughbred industry todevelop the Breeders= Incentive Fund. The Fundamounts to $14 million plus--about $12 million of that
goes to the Thoroughbred industry.
If re-elected, what do you plan on doing to support theracing industry during your next term?
We want to continue in any way we can to expand
the Breeders= Incentive Fund. I think there=s a lot that
can help us basically increase the purses here for folksthat breed horses in Kentucky, not just those whocome in and race. The industry has a foundation ofbreeding here in Kentucky. Racing is extremely
important and a wonderful part of the culture, butwhen you look at the entire industry, it is the breeding
industry that=s extremely important. We want to growthe incentives for individuals to breed their horses inKentucky and race them in Kentucky. We believe that
as we increase the purses based on whether horses arebred in Kentucky, it will attract not only more people torace here. Overall we have high purses on the nationalaverage, but the Fund allow us to increase purses at
those tracks where they may not have quite as high.
Fletcher Q&A cont.

Fletcher Q&A cont.

We additionally want to change the way we treat thehorse industry--consistent with I what I worked to doon the Farm Bill in congress. What I wanted to do there
was to designate a horse farm so that it=s considered anagricultural industry, not separate from agriculture. Thatmeans you would be exempt from sales tax when you
buy feed, hay, fencing. All of those things that areimportant for horse farms would be exempt from thesales tax for the first time.
We passed the House Bill 350, creating tax incentives
to attract international horse racing events like theBreeders= Cup as well as the Alltech Equestrian Games,
so we have some incentives for other equestrian sports
and activities here. We were able to secure the World
Equestrian Games, which are being held outside ofEurope for the first time; that will be in 2010, when the2010 Alltech World Equestrian Games come to central
Kentucky.
One of the things with the Thoroughbred Incentive
Fund, the incentives go not only to the breeders ofwinners of all maiden special weight, allowance andstakes races in Kentucky, but also winners ofGrade I races outside of Kentucky. If you look at those
Grade I stakes components, they allowed us provide
incentives both on the state and national level. Thatreally promotes the industry, particularly breeding here
in Kentucky, which is very very important to ourtradition.
The last time you were up for election, you said thatyou wouldn=t stand in the way of the people voting on
gaming in Kentucky. Now you are opposed to gaming
and casinos in Kentucky. What is your stance on thatissue?
When I last raced, I said, from the standpoint of aconstitutional amendment, that if the general assembly
pushed it, I don=t personally support it--I would not go
out and support it. The vote is on the people. When myopponent now has stepped up and said emphaticallymultiple times that he will get it passed, I=ve said he=s
making this election a referendum on gaming. He=spretty well guaranteed that if he gets elected, he=sbringing casino gambling to Kentucky. I=m personallyagainst that and I=m taking a strong stand and saying I
don=t believe that=s good for Kentucky. I know it=s notgood for the economy and I really don=t believe in thelong run that it=s good for the horse industry or theThoroughbred racing industry.

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Can you expand on why you don=t think it would bebeneficial to the horse industry or to Kentucky as awhole?
What you=re doing is you=re coming into those
racetracks that may not be able to offer higher purses
and using a portion of casino gambling proceeds topush-up those purses. And what you=re saying is thatyou=re really having less interest in horse racing than
you are in slots or video lottery. There=s a marked
difference between casino gambling and what happens
there versus horse racing. It doesn=t deliver thepromised revenue because it really is a revenue shift--it
takes money out of other businesses. What you will seein the future, I believe, is it will lessen the number ofindividuals who are interested in coming out to a horse
race and wagering on horses because they are going to
be involved in casino gambling. You will eventually find,I think, that the legislature, over a period of time, will
look and say, >we are no longer going to subsidize thesepurses that are not self-sufficient.= I think it will be a
detriment in the long run, and there are a number ofhorse people who believe it will too. I think there=s aworld of difference in the people who are involved in
the horse industry versus the people who are involvedin the casino industry. You don=t have the long standing
history of organized crime--you don=t have any historyof organized crime in the horse industry--compared towhat you have in casino gambling. It brings in adifferent culture of people, brings in a different impact
on the government and also has a tremendous impact
on shifting money out of the economy, which horse
racing doesn=t do. Horse racing has an economy of its
own that=s very beneficial to breeding industry, thetraining industry, the racetracks. That money stays
within the state. That=s why I think gaming and casinos
are a bad idea for the economy, a bad idea for families,
and I don=t think it=s a good idea for the Thoroughbredindustry in the long run.
The purses generally go up at racetracks that have
VLTs and casino gambling. With a lot of theneighboring states having that, and competition sotough these days in racing, do you fear that it=s going
to be hard for the smaller tracks in Kentucky like Ellis
and Turfway to compete with the neighboring states?
Do you think they will be in any danger if their purses
can=t compete with some of the neighbors?
I don=t think there=s any question, with those tracks
that don=t have the level of racing and level of purses,that there are some concerns. But I think there areother ways--breeders incentives and other incentives--tohelp promote those tracks without bringing in casino
gambling, which I think isn=t going to sustain a trackthat isn=t self-sufficient in the long run. You=re not goingto have legislative support for a track that=s not selfsufficient. I would rather work to make those tracks
self-sufficient through good management, and look atwhat other incentives we can provide that will attract
more people and more horses to race at those tracks.
Fletcher cont.

Keeneland and Turfway Park have both recently
switched to synthetic racing surfaces. What do you
think of synthetic surfaces?
There=s no question that you decrease the number ofinjuries. It=s much more friendly to the horses and I
think that=s helping the industry, too. If there are any
people who have some reticence about horse racing
because of the injuries that occur, [synthetic surfaces]
lessen that concern substantially. It=s been a goodexperience here and I imagine we will see that type ofimprovement at tracks all across the country. It=s goodfor the horses, and what=s good for the horses is goodfor all of us.
Since you=ve been elected governor, what=s been yourproudest or most memorable moment in racing?
There=s no question--I=ve given away four Kentucky
Derby trophies. That is one of the most exciting times
in Kentucky each year--that first Saturday in May. The
crowd sings >My Old Kentucky Home,= the Kentucky
Derby occurs and it=s so exciting because you can see
the thrill in the horse that=s won. They know they arechampions--you can tell by the way they carrythemselves; they know they have just won the mostimportant horse race in the world. And giving thattrophy to the owner, the trainer, the jockey, is one of
the most exhilarating experiences a governor in
Kentucky has.
Anything else you would like to add?
Last year we had 11,200 mares registered. We=re stillregistering for 2007, and we will exceed that. Folks talkabout the number of mares decreasing. That=s not thecase, and we believe the Breeders= Incentives are
helping that. We=ve had two large operations just close
their operations in Florida and move to Kentucky-Cloverleaf and Padua. Our Breeders= Incentives, Ibelieve, played a role in that. We=ve had money
distributed by 2,600 breeding partnerships, and 4,000
races have been won by Kentucky-breds that receivedawards. We plan on distributing $15 million in 2007.
That it promotes not only racing in Kentucky, but it
promotes breeding, which is an integral part. It brings
the industry together, rather than divides it.