Horse Racing: Kentucky to introduce “Instant Racing”
The Kentucky Horse Racing Commission has made necessary changes to existing regulations to introduce ‘Instant Racing’ at Kentucky racetracks. The Racing Commission hopes to boost revenues with the slot-like machines. However, there are still concerns about the legality of the machines.
The Attorney General questioned the legality of instant racing, saying that it does not constitute pari-mutuel wagering. The Racing Commission contests the statement saying that the game does indeed fall under pari-mutuel wagering, and thus, the racing commission has the authority to regulate it. To allay concerns by racetracks that the state might declare the machines illegal after investment into them has been made, the commission asked Kentucky courts to review their argument. A court ruling would give the green light that sceptical tracks have been seeking before they make investments into the machine.
The commission amended the definitions of governing thoroughbred, standard bred and other forms of horseracing to also address instant or historic racing.
In instant racing, instead of betting on live races, the bets are taken on historic races. The name of the horses, jockeys, trainers and other identifiable information is concealed and only limited information is available to handicappers. The races are chosen randomly from a database and revenues would be taxed under the same regulation as pari-mutuel live racing. The wagers are pooled and odds calculated by the amount of money wagered on each horse. A percentage of the revenue from instant racing would go into state purses.
The racing commission had earlier tried to get approval for casino-like games at their racetracks, but so far has not had the success it sought. There is stiff resistance to gambling in Kentucky, and opponents have so far been able to fend off the racing commission’s efforts to introduce gambling. Governor of the state, Steve Beshear, has made two attempts to legalize conventional gambling in the state but has failed.
Kentucky racing faces an unfair competition with neighbouring states, where gambling is legal and racetracks support their purses and give incentives to horsemen with proceeds from it. Higher purses and fuller fields attract more betting and means more revenue for racetracks, but Kentucky has been left out of the loop. Kentucky gambling statutes prohibit gambling, giving a competitive advantage to Pennsylvania, West Virginia and Indiana in their neighbourhood.
“I believe the approval of these regulations will help our ailing racing industry by providing much-needed revenue to increase purses and help keep owners, trainers, and their horses in Kentucky,” Kentucky Horse Racing Commission Chairman, Bob Beck, said. Commenting on the changes to the regulations made, Beck said that the racing commission made the changes before seeking approval from the Franklin circuit courts to expedite the process, and was hoping that with these measures a conclusion could be promptly reached.
Beck said that the machines would not in themselves be enough to save the industry from fading public interest and competition from beyond state lines, but said that it would help tracks and horsemen generate more revenue. Owner of Ellis Park, Ron Geary, agreed with Chairman Beck and said that the there was still a gap in the competitive playing field between Kentucky and its neighbours, but with the new regulations, it has been somewhat narrowed.
The gap couldn’t be reduced by much considering that Oaklawn Park, which already has installed the instant racing machines, was able to generate only $25 million through them. In contrast, the proposed video lottery terminals to be installed at 7 locations were estimated to generate $800 million in revenues. The gap Ron Geary spoke of appears to be as wide as ever.
“The horse industry supplies 100,000 jobs in our state and creates $4 billion in economic impact, making it a significant contributor to our state’s economic health. This action is not a cure-all, but it is an important step that will help support our ailing signature industry,” Governor Steve Beshear said.
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