News and STORIES

A Major Shake-up within the Kentucky Horse Racing Industry

Author: Clint Goodman
Published: Friday October 02, 2020

There was some major news out of Kentucky this past week as their Supreme Court ruled in a 7-0 decision that wagering on horse racing machines did not fall under the Kentucky Horse Racing Commission. Their reasoning for this was stated as "the Encore system does not create a wagering pool among patrons such that they are wagering among themselves as required pari-mutuel wager…”

In short, the court ruled that these machines were not fitting current horse racing law because they involved the players gambling against the slot machine, which is the house, rather than betting against themselves, which would be the case when doing so on a horse.

This overturned a prior ruling from The Franklin Circuit Court and set a new precedent in the state of Kentucky. They ruled in favor of this because they could not find sufficient evidence to prove that these machines were the same as betting on a live horse race.

These types of bets took place on machines very much like slots ,and were focused around the idea of trying to create a similar feeling of betting on a live horse race. After placing your bet, you were able to either watch the animated race play out or simulate until the end for instant results.

This all ties into live action horse racing because of the precedent this case will set going forth. The money involved with these machines helped fund the live horse races, and that money will no longer be available. Where will these funds come from now, and will this have a huge effect on how much we see live action horse races price their events in Kentucky? This is a multi billion-dollar industry that helps generate a lot of jobs as well as revenue for the state, so it will be very interesting to see how this plays out going forward.

Will future races and events have to find new sponsors? How will stocks that were impacted by this bounce back? Is there a new, legal program that can fulfill this void?

There are a multitude of new questions that will be raised as the Kentucky racing industry tries to move forth after suffering this blow. It wasn’t as if this was a split decision either, as the court ruled unanimously. This is an instance of the law enforcing legislation diction seriously, as the court wanted to be sure that the meaning of pari-mutuel gaming was not being bent or overlooked just because it was beneficial monetarily for the state or its economy.

By challenging the validity of these games, the Family Foundation of Kentucky was able to uphold the state’s moral values of enforcing their law the way it is written, but ultimately made a lot of the bettors and fans within the horse industry angry due to the negative economic implications it will cause. This will be an interesting situation to pay attention to, especially as the Covid 19 pandemic has taken a chunk of revenue out of the horse racing economy already.