KHRC: Time to Confirm Court Did Not Miss Details of Material Consequence

The Kentucky Horse Racing Commission (KHRC) is worried the state Supreme Court ruling that slot-like gaming systems at some of the race tracks in Kentucky do not constitute pari-mutuel wagering would have “crucial and wide-ranging” consequences. The commission asked the court for an additional 2 weeks to prepare a potential request for a rehearing of the case.

Historical Horse Racing Not Pari-Mutuel Wagering

The Kentucky Supreme Court ruled on September 24 that at least some slot-like historical horse racing games being used by race track gambling parlors may not be legal, as the system “does not create a wagering pool among patrons such that they are wagering among themselves as required for pari-mutuel wagering.” In its essence, the unanimously reached court ruling reversed the 2018 Franklin Circuit Court’s approval of the gaming system, stating that the court applied the wrong legal standard then.

In this sense, the historical slot-like gambling machines resemble more a casino-type gaming where players bet against the house, instead of against each other. In pari-mutuel wagering, as is in horse racing, gamblers set the odds for each outcome because they are betting against each other. But the state constitution allows only pari-mutuel wagering, as well as bingo and lottery, while casinos and slot machines are being prohibited.

State Lawmakers May Need to Enact Changes

The KHRC does not have the authority to allow bets in which every patron is wagering on something different “without positive legislative action and sanction,” the opinion written by Justice Laurance B. VanMeter concluded, raising the need for Kentucky lawmakers to enact changes to ensure the industry that generates in excess of $2 billion annually is allowed to continue.

“…this Court’s decision directly impacts approximately 80,000 jobs and may significantly reduce horse racing’s $3.4 billion contribution to Kentucky’s economy.”

KHRC filing

In the filing the KHRC said that due to the technicality involved in the facts, the commission would need more time to consult with its witnesses and review the whole documentation to be able to confirm that the court did not missed any details of material consequence. It is hardly a secret that the entire horse racing industry is heavily dependent on the historical slot-like horse racing, the KHRC outlined.

Gaming Profits Generate Taxes Which Support the Horse Industry

The profits from historical horse racing machines at the tracks account for millions in taxes which are then directed to support the horse racing industry by supplementing prize pools for race winners and keeping races in the state, the KHRC continued. And for the time being the venues that run the Exacta Systems gaming platforms have been allowed by the commission to continue operating despite the court ruling.

“The Kentucky Horse Racing Commission respects the Kentucky Supreme Court’s decision. The Commission is considering its options and will take action as soon as we come to an appropriate resolution.”

KHRC

Asked about whether it would take any regulatory actions regarding the court ruling, the commission declined to answer.

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