Horsemen to Help Defray Instant Racing Costs

Purse allocation during start-up would be deferred to help with costs.

When Kentucky Downs becomes the first Kentucky track to implement Instant Racing, it will do so with the takeout from the electronic games allocated to purses during the first year being used to help defray startup costs. The retained purses would be repaid during the calendar year following the adjudication or settlement of lawsuits relating to Instant Racing in the state.

Under an agreement with the Kentucky Horsemen’s Benevolent and Protective Association, about 15% of the Instant Racing revenues accruing to Kentucky Downs would go to purses. Of that, 14% is allocated to horsemen’s purses at Kentucky Downs and 1% to the Kentucky Breeders Incentive Fund.

“In 2011, Kentucky Downs shall retain commission acquired from pari-mutuel wagering on historic races designated for horsemen’s purses after paying associated state tax, to assist with the construction and other start-up costs attributable to the historic racing venture at Kentucky Downs,” states the agreement that was included in the track’s application approved by the Kentucky Horse Racing Commission for it to conduct Historic Racing.

Historic Racing is the name under which a form of Instant Racing has been approved by the KHRC, and that name and Instant Racing have been used to describe the new games, which were first implement at Oaklawn Park in Arkansas. The agreement between horsemen was first reported by the Louisville Courier-Journal.

Kentucky Downs will be the first Kentucky track to implement Historic Racing and plans to have the facility renovated and 200 machines installed prior to the opening of the track’s four-day meet Sept. 10. The track in Franklin, Ky. is planning to hire 85 new employees and invest $3 million to mplement its form of Instant Racing.

Because the amount of money involved is based on a percentage of the amount wagered through Historic Racing, Kentucky Downs president Corey Johnsen declined to estimate how much the retained purses would total, but said it will be over $100,000.

He said the financial commitment from the KHBPA will enable the track to present a better product than it would be able to without the purse concession and that it illustrates the horsemen’s willingness to be partners in the venture.

“As the first presenter of Instant Racing in Kentucky we want to make sure it is housed in a first class environment and that we are able to spend the appropriate amount on construction, marketing, and administration,” Johnsen said. “We appreciate the true partnership we have with HBPA. It’s representative of the horsemen sharing with Kentucky Downs some of the startup capital necessary so we can do a better job in the presentation and marketing of Instant Racing.”

As Johnsen has stated previously, the KHBPA-Kentucky Downs agreement calls for sharing of revenues from Instant Racing to other tracks in the state when the track averages $250,000 a day in purses.

KHBPA president Rick Hiles said he has been pushing for the tracks to go ahead and implement Historic Racing because of the purse money that could be generated while its legality is still being considered by the courts. He said he felt the agreement between the KHBPA and Kentucky Downs was a reasonable way to help get the games underway while at the same time protecting the horsemen’s bottom line.

The legality of Historic Racing is still under review by the state Court of Appeals in an appeal filed by the Family Foundation of Kentucky. The organization, which contends that Historic Racing is unconstitutional because it constitutes a form of electronic gaming that is prohibited, appealed a lower court ruling that upheld the gaming.