Lawmakers worried about preserving Kentucky's horse capital status presented a plan Thursday that offers a cash infusion to bolster the state's racing industry by taxing Internet betting and allowing a new form of gambling on old horse races.

The measure cleared the Senate State and Local Government Committee on an 11-1 vote, signaling bipartisan backing to boost a signature Kentucky industry, which some fear is falling behind as tracks elsewhere have sweetened purses by offering casino-style gaming.

The proposal offered by Sen. Damon Thayer would open Kentucky race tracks to Instant Racing, a pari-mutuel-style game in which gamblers bet on past races without knowing the names of the horses.

Money generated from a 1.5 percent fee on Instant Racing wagers would flow into a fund meant to supplement race purses at Kentucky tracks for Kentucky-bred horses.

Another key feature would impose a 1.5 percent tax on Internet wagering of Kentucky horse races. The proposal seeks a share of the money from the growing popularity of online and phone betting. That revenue also would be directed to boost live racing in Kentucky.

Thayer, R-Georgetown, said the proposal was a way to offer broad support for the industry — from the tracks to the horse owners, breeders, trainers and jockeys.

The measure also would do away with the state's two-tiered pari-mutuel taxing system for wagering at the tracks. Instead, it would set a flat rate of 1.5 percent.

Sen. Julian Carroll, D-Frankfort, said the proposal would help the industry, which he said has been hurt by "ridiculously low" race purses. But he expressed doubts that it was enough.

"We're throwing them a life preserver, but I want to tell you I don't think we're bringing them out of the water," Carroll said during the committee hearing.

Thayer said he hoped the proposal could double the amount of money flowing into the funds meant to help supplement purses for Kentucky races.

Sen. Mike Reynolds, D-Bowling Green, cast the lone vote in committee against the bill.

When asked afterward why he opposed the measure, he replied: "I ran on the idea of no expanded gambling, and I vote that way."

Thayer said he considers Instant Racing another form of wagering on horse racing.

Machines used for Instant Racing resemble video lottery terminals, he said, but it's a pari-mutuel-based game. Betters can scrutinize information about each horse's past performance, without knowing its name, he said. Wagerers can place their bets based on that information, or they can use other hunches.

"If you like the gray horse and the jockey has UK (University of Kentucky) blue silks on, you can bet for that reason, too," Thayer said.

Thayer said Instant Racing has been a big success at Oaklawn Park in Arkansas, where track officials credit the game with helping generate millions in extra purse money for live racing.

Racing interests in Kentucky have been pushing for casino-style games at horse tracks.

Last year, a measure to allow video gambling machines at the tracks passed the House during a special session but died in the Senate.

This year, expanded gambling has been a nonstarter, though Gov. Steve Beshear included $780 million in his budget proposal that was dependent upon legalizing video slot machines at race tracks.

The measure now heads to the full Senate. If it passes there, it will return to the House, which will consider the changes made by the Senate.

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