Keeneland officials said they view their plan to build a Quarter Horse racetrack and entertainment center in southeastern Kentucky as part of an overall effort to improve the economics of the horse industry in the state and grow its fan base with help from historical race wagering revenue.
Keeneland president Bill Thomason and vice president and chief operating officer Vince Gabbert discussed the plan with The Blood-Horse Feb. 15. The endeavor was first reported by the Lexington Herald-Leader Feb. 14.
Full House Resorts, a Las Vegas-based casino and entertainment company that operates Rising Star Casino Resort in Indiana, would partner with Keeneland on the new facility, which would also house historical racing machines and a year-round full-card simulcast operation. The partners hope to purchase Thunder Ridge Raceway, a harness track and simulcast facility in Prestonsburg in the Appalachian Mountains of Kentucky, and move the license to a location near Corbin, not far from the Tennessee border.
The deal hinges on approval–judicial or legislative–of historical race wagering, which already occurs at Ellis Park and Kentucky Downs. Though the form of wagering, also called Instant Racing, is authorized by racing statute and regulated by the Kentucky Horse Racing Commission, a legal challenge has put the issue in the hands of the state Supreme Court.
"Everything is conditioned upon Instant Racing being fully active via legislative or judicial means," Gabbert said. "That's the first step to accomplish to get the deal finalized."
Gabbert confirmed the push to introduce historical race wagering legislation before the Feb. 19 deadline for new bills to be filed. The House of Representatives has floated Instant Racing as a means to generate some revenue for the state pension program; a bill for historical racing was filed the morning of Feb. 15.
"The industry as a whole is a driving force behind (the legislation)," Gabbert said. "Keeneland definitely is playing an active role in facilitating it."
Gabbert, an attorney, explained that legislation if passed would "codify" administrative regulations already in place for historical race wagering and render the legal challenge moot. The Family Foundation of Kentucky is the only party in the lawsuit challenging the form of wagering the state Attorney General's office has said is pari-mutuel.
Republican Sen. Damon Thayer, who sponsored Instant Racing legislation a few years ago, couldn't be immediately reached Feb. 15 to comment on whether he is involved in the effort. Since September 2011, about $250 million has been wagered through the machines at the two Kentucky tracks.
As for the planned Quarter Horse racetrack, Thomason said it fits with Keeneland's mission and objectives even though Keeneland is a Thoroughbred operation. He said it would carry on the Keeneland tradition and support the local community with a modern entertainment facility.
"We're trying to find things we can do right now to move the industry forward," Thomason said. "We plan to reinvest in the horse industry and continue our fan-development initiatives. That's not to say there aren't a number of things we will continue to work on, but the historical racing model has been successful. We think we can use it to develop (our business)."
The southeastern Kentucky area has long been mentioned as a desirable location for casino gambling should it ever be legalized in the state. Efforts to introduce a constitutional amendment on casinos has stalled but is expected to resurface in time for the 2014 General Assembly session.
When asked if the Quarter Horse track plan is a proactive attempt to get a foothold in that part of the state, Thomason said: "It's more proactive from the standpoint of the industry as a whole. The Keeneland model is unique, and this is more about providing another racing breed with a model that can work."
Thomason and Gabbert said the facility, if built, would capitalize on the Keeneland brand. They noted the Lexington racetrack draws well from southeastern states during its spring and fall race meets, so a location near the Tennessee border is a good fit.
Development plans are far from complete, but Gabbert said Keeneland and Full House initially would construct only a dirt straightaway for Quarter Horse racing, which would be offered 10 to 12 days a year in the summer. That set-up would preclude Thoroughbred, Arabian, and Standardbred racing.
Gabbert said racing other breeds "at this time is not part of the initial plans," but the facility would be built to "prepare for any kind of expansion."
Quarter Horse racing was last held at The Red Mile in 2010. The track abruptly canceled its two-night meet in 2011 but continues to offer simulcasts of Quarter Horse meets.
Thunder Ridge, located about two hours from Lexington, will race 21 days in April and May this year. It makes up a harness racing circuit with Players Bluegrass Downs (15 days in June and July) and The Red Mile (29 days from August through early October).
Kentucky Harness Horsemen's Association executive secretary Gabe Prewitt couldn't be immediately reached Feb. 15 to comment on the recent developments. Though Thunder Ridge often handles less than $5,000 a day on its live product, the racing dates are considered important to horsemen that race in Kentucky.
In a memo to KHHA membership on its website, Prewitt, who also works for The Red Mile during live meets, said the KHHA "was never approached by Keeneland/Full House about the possibility of the new facility remaining a harness license, which is very unfortunate and an opportunity that we would have obviously been extremely interested in."
Gabbert, meanwhile, said Keeneland's discussions about the project with the harness industry have been through its connection with The Red Mile. The two tracks have an agreement to combine on an Instant Racing facility in Lexington, most likely at The Red Mile, when the legal issues are resolved.
"We've relied on the relationship piece with The Red Mile," Gabbert said. "We would work with The Red Mile in allowing it to run more (live harness days to compensate for the loss of Thunder Ridge)."
If the deal between Keeneland and Full House goes through, Kentucky would have six of eight racetracks with some tie to gaming companies even though casino gambling isn't legal. Churchill Downs Inc. operates casinos and has a small interest in Kentucky Downs; Turfway Park is 90% owned by casino interests; Ellis Park last year took on as a partner Saratoga Casino & Raceway; and Bluegrass Downs is fully owned by gaming interests.
