Instant Racing Machines at Kentucky Downs

Instant Racing Machines at Kentucky Downs

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Appeals Court Remands KY Instant Racing Case

The case goes back to circuit court after two of three judges voted to do so.

The Kentucky Court of Appeals has remanded the Instant Racing case to Franklin County Circuit Court after vacating that court’s findings.

In an opinion released June 15, two of three appeals court judges said the request for discovery by the Family Foundation of Kentucky, which is challenging the legality of Instant Racing, “was relevant and necessary to the court’s determination, and that denial of discovery constituted an abuse of discretion.”

The appeals court said it is “unable to address the merits of the remaining issues” because of the lack of discovery. The court heard oral arguments April 25.

Senior judge Joseph Lambert and judge Janet Stumbo voted to remand the case to circuit court. Judge Sara Combs, who dissented, said she agreed with the circuit court that “all the issues before it were purely legal issues precluding the need for—or recourse to—discovery.”

Combs also said she believes Instant Racing regulations approved by the Kentucky Horse Racing Commission are a “legitimate exercise of the authority (of the commission) and that they constitute pari-mutuel wagering.”

The opinion further delays implementation of Instant Racing beyond Kentucky Downs, which launched the games Sept. 1, 2011. Other tracks in the state have been waiting on resolution of the legal challenge to move forward.

Meanwhile, Kentucky Downs has cleared the $100 million mark in wagering on the instant racing machines, which resemble video lottery terminals but are considered pari-mutuel because the games are based on the results of historical races and all money is pooled.

According to KHRC statistics, $97.66 million was bet through Instant Racing at Kentucky Downs from Sept. 1, 2011-May 31 of this year. May was the track’s best month to date with an Instant Racing handle of $15.69 million.

Handle has grown each month with the exception of April of this year, when it declined by almost $1 million from March. It then jumped about $1.5 million in May.

Given wagering patterns, the $100 million mark in handle has been passed in June.

"Today’s ruling in no way changes the position of Kentucky Downs that pari-mutuel wagering on historical racing fully complies with the law," Kentucky Downs officials said June 15 after the opinion was released. "Kentucky Downs will continue to operate Instant Racing under the regulatory authority of the Kentucky Horse Racing Commission, whose regulations remain in full force and effect.

At a time when the Kentucky horse industry is at a competitive disadvantage with other racing states, Instant Racing has generated nearly $2 million for purses and breeders’ awards. As Kentucky Downs continues to operate Instant Racing, we take very seriously our role in improving the economy and creating jobs, and look forward to our race meeting in September when we will offer record purses and breeders’ awards."

Gov. Steve Beshear also commented on the latest development.

“Counsel for the various parties are reviewing the opinion of this divided court and evaluating the next steps," Beshear said. "Although a majority on the court believed that further facts needed to be developed before they could render a decision, I am confident that the authority of the Kentucky Horse Racing Commission to authorize wagering on historical horse racing will be affirmed.

"In the meantime, I am pleased that the status quo has been maintained so our racetracks can continue to offer these exotic wagers until the case is decided.”

In May, Instant Racing generated $147,048 for purses, $117,821 for the Kentucky Thoroughbred Development Fund, and $10,503 for the Kentucky Breeders’ Incentive Fund, according to KHRC statistics.