Despite concerns voiced by one member, the Kentucky Horse Racing Commission has approved an additional 40 historical race wagering machines and additional types of games and wagers at Kentucky Downs.
Approval for the expansion of the electronic form of gaming by the commission at its April 9 meeting came after commissioner Ned Bonnie questioned the timing of the request from Kentucky Downs. Bonnie, an attorney, also called into question the names of the new games that will be offered on the machines.
The machines, patterned along the lines of Instant Racing machines first installed at Oaklawn Park, resemble video lottery terminals—but the on-screen games are based on the results of previously run horse races that are superimposed on the screen while the game is taking place. The revenue is divvied up the same way as a pari-mutuel bet on live racing in the state.
So far, Kentucky Downs and Ellis Park in Henderson are the only two Kentucky tracks to offer historical race wagering. The other tracks in the state have opted to hold off on investing in historical race wagering until a legal challenge by the Family Foundation of Kentucky is resolved.
The Kentucky Attorney General's office has deemed historical race wagering legal because it is a form of pari-mutuel wagering, and the KHRC adopted regulations to facilitate the form of gambling. The state's racetracks and the state itself were successful in petitioning the Kentucky Supreme Court to consider the legality of historical race wagering, though there is no public timetable for a ruling.
Bonnie, an attorney with the firm of Frost, Brown, Todd, LLC, specializing in equine law, said he continues to support historical race wagering as a way to help generate much-needed revenue for the state's racing industry. Also, Bonnie said he believes the types of games approved so far for implementation in Kentucky are consistent with the statutes.
But Bonnie said he believed it was inappropriate for Kentucky Downs to be requesting an expansion of historical race wagering when the legal case is pending before the state Supreme Court and the request could add to the opposition's arguments.
"In light of the lawsuit, I am frankly surprised they would expand their betting possibilities before the lawsuit is finally determined," Bonnie said of Kentucky Downs, which did not have a representative at the meeting. "It may be close to legal; it may be arguably legal, but this is not necessarily appropriate. I think this additional betting system is just moving us farther away (from historical racing) and will add fuel to the arguments that this is a sham."
KHRC chairman Robert Beck told Bonnie that the new games—called Treasure of Egypt, Bayou Bash, Very Cherry, and Pigs in Mud 2—had followed the same review process as other games previously approved for Kentucky Downs and Ellis Park. Beck said the games comply with model rules from the Association of Racing Commissioners International for such gaming and had been reviewed by John Walzak for compliance.
"Do we need another opinion?" Bonnie asked. "We are paying our expert to tell us what we want him to say and he has said it. The opposition says it's dead wrong. It makes me very nervous because this is stretching the interpretation of the statute to begin with and it is moving us further down away from historical racing. I want to register my discomfort with the expansion at this time and whether it is consistent with the statute."
Beck said Walzak made an independent review of the games and they would not have been approved if he had rendered a negative opinion.
Bonnie abstained from voting on the Kentucky Downs request, which was approved by all the other commissioners present.
According to information presented at the April 9 commission meeting, nearly $302.6 million has been bet through the machines since they were first installed at Kentucky Downs in September 2011 and at Ellis Park on Aug. 31, 2012. With the latest approval, Kentucky Downs will have more than 300 historical race wagering machines operational.
Of that, almost $19.9 million has gone to the tracks, which have in turn paid out $2.8 million of the historical race wagering revenues to purses. An additional $198,883 from the track's commission has gone to the Breeders' Incentive Fund.
The $4.5 million from historical race wagering that has gone to the state of Kentucky has included $1 million to the general fund, with the remainder used to fund various equine and educational programs.
Also during the meeting, commissioners were presented a report showing a total $142.7 million was wagered by Kentucky residents in 2012 through advanced deposit wagering companies. The largest amount—$63.8 million—was wagered through Churchill Downs, Inc.-owned TwinSpires.com, followed by TVG with nearly $54 million. The smallest grossing ADW provider in 2012 among Kentucky residents was Racing2day, which handled $34,125 in wagers.
