Pros, Cons of Instant Racing Aired in KY

"Historical race wagering" patterned after Instant Racing in Arkansas.

A public hearing designed to gauge public opinion about a proposal to permit "Instant Racing" type wagering in Kentucky became a faceoff between representatives of the state’s horse industry and the Family Foundation.

The Sept. 29 hearing conducted by the Kentucky Horse Racing Commission at The Red Mile harness track in Lexington was attended by about 100 people, most of whom are involved in some element of the horse industry. Of the 15 speakers at the hearing, 11 were in favor of action by the KHRC in which the regulatory body adopted a set of new regulations regarding exotic wagering that would permit a form of Instant Racing. The other four—all representing the Family Foundation—were opposed.

The heavily pro-historical race wagering crowd applauded after each proponent spoke and was quiet after presentations by the Family Foundation speakers.

Patterned after a successful Instant Racing program that has propped up the Arkansas horse industry after being implemented at Oaklawn Park, the Kentucky wager is labeled "historical racing." The electronic form of gaming involves a player betting on a previously run race in which they do not know the outcome.

The KHRC began pursuing Instant Racing after legislation permitting casino-type gambling at racetracks failed during the 2010 session of the General Assembly. The state’s attorney general has ruled that historical race wagering is not currently allowed because it is not permitted under current regulations. The new regulation is designed to rectify that.

The KHRC and the state’s racetracks have joined forces in seeking a court opinion on whether the regulations are permitted under state laws relating to pari-mutuel wagering.

Dr. Andy Roberts, who was one of the first to speak on behalf of historical racing, cited the economic impact his veterinary practice and horse farm have on the state of Kentucky. Noting his practice generates about $500,000 annually, Roberts explained that using a commonly accepted economic impact multiplier of four he is responsible for an annual $2 million contribution to the state’s economy.

Roberts said that is threatened, however, due to the disparity between the declining health of the Kentucky racing industry and racing in neighboring states in which purses are subsidized by alternative, casino-type gaming at racetracks. An emotional Roberts noted how he recently loaded the only stallion that stood at stud at his Scott County farm and relocated him to Indiana.

"We have to stop the bleeding," the veterinarian said. "We need a fair and equitable way to stay in the business in Kentucky."

Stan Cave, an attorney representing the Family Foundation, delivered a lengthy, detailed analyses of why his organization does not believe the regulations.

"Gambling on previously run races is not pari-mutuel racing," Cave said. "Under no scenario is Instant Racing within the definition of pari-mutuel wagering. Not only is the commission’s authority (to implement the regulations) in doubt, but it is non-existent."

Cave, who said his organization believes the horse industry and the KHRC is attempting "to accomplish indirectly what they have been unable to accomplish" legislatively, questioned why the proponents of historical racing filed the suit in Franklin (Kentucky) Circuit Court seeking an opinion on its legality.

Patrick Neely, executive director of the Kentucky Equine Education Project, defended the historical race wagering regulation as being "rightfully and legally acopted."

He said the horse industry does not view historical race wagering as the final solution to Kentucky keeping pace with states in which casino-type wagering subsidizes purses, but called it a "great first step."

"We believe these regulations will buy us some time," Neely said, adding that Oaklawn Park officials have said that track would have closed were it not for revenue from Instant Racing. "The evidence is irrefutable—our industry is under siege," he said. "The truth is we can’t compete."

More than one of the speakers noted the irony of how many within the Kentucky racing and breeding industries are seeking ways to preserve their livelihoods for the benefits of their families, and that the opponents of historical race wagering represent the Family Foundation.

"I bought my farm for my family," said Bill Wahl, who worked for United Parcel Service for 25 years before developing the Starlight Training Center.

"We are for the horsemen and we are for the families," responded Kent Ostrander, executive director of the Family Foundation. "If I had an answer to help the horse industry, I would offer it."

Ostrander said his organization believes the negatives associated with expanded gambling have a derogatory effect on families.

Ostrander also said his organization and representatives of the horse industry worked together in the 1990s to block casinos from being legalized in Kentucky and other states. He said it appeared the horse industry had adopted an "if you can’t beat them join them" approach.

"We (the Family Foundation) are still standing where we did in the early 1990s," he said.