LEXINGTON, Ky. (AP) - The Kentucky Horse Racing Commission
approved the first expanded gambling at a state horse track
Thursday.
Kentucky Downs in western Kentucky had requested permission to
implement the game in which gamblers bet on past horse races using
slot-like devices. The game is known as Instant Racing at Oaklawn
Park in Arkansas, where it has been a strong moneymaker since it
began a decade ago.
Corey Johnsen, president of Kentucky Downs, said the track plans
to invest $3 million and hire 85 workers to implement the new
betting option. The commission approved the request by a voice vote
with no opposition.
Johnsen said plans are to have 200 devices offering the new
wager prior to Sept. 10, when the track at Franklin, near the
Tennessee border, opens its four-day meet.
In Instant Racing, tracks accept pari-mutuel bets on
rebroadcasts of old races, stripped of the names of the horses,
jockeys and trainers.
"We feel like, based on conservative projections, this would
generate millions of dollars to the state on an annual basis in
pari-mutuel tax," Johnsen said following the commission's vote.
Under state excise tax law, Kentucky would receive either 1.5 or
3.5 percent of the amount wagered, depending on the average amount
bet on a daily basis each year.
Johnsen said the $3 million investment would include renovations
to the turf-only track's main betting hall to house the new
machines, marketing and the hiring of new employees.
The track plans to lease new machines, at least initially, as
part of a phased approach in implementing the game. This comes as
the legality of the new offering is still in question.
The Franklin County Circuit Court, in Frankfort, ruled in
December that the Instant Racing machines are pari-mutuel in nature
and therefore legal under current Kentucky law. The Family
Foundation of Kentucky, a longtime opponent of any expanded gaming
in the state, has appealed Judge Thomas Wingate's decision to the
state Court of Appeals. There is no indication as to when the Court
of Appeals will hear the case.
"We feel like we're on sound legal ground, and we're willing to
take any risk that there is. That's one of the reasons for the
phased approach," Johnsen said, adding that additional machines
could be requested in the future.
Stan Cave, counsel for the Family Foundation of Kentucky, sent a
letter Thursday to the commission claiming that the KHRA had a
conflict of interest in approving Instant Racing when it is on the
same side of the court case of the tracks it governs.
Johnsen said he hopes that additional revenue from the new
wagering will allow the track to boost the 2012 live race meet to
six days and its average daily purse distribution to $250,000 from
its expected 2011 number of $150,000. The increased daily purse
average would help the track better compete with tracks in other
states in the region, such as Indiana, Pennsylvania and West
Virginia, which have bolstered their states' horse industries with
additional revenue from slot machines and other gaming in recent
years.
A track executive in Texas before becoming a part owner in
Kentucky Downs, Johnsen considered today's decision an important
step in putting the state's signature industry on better footing.
"The horse industry, you know, needs some economic growth. And
frankly, it needs a morale boost."
While three racetracks in the state - Churchill Downs in
Louisville, Turfway Park in Florence, and Ellis Park in Henderson -
border markets in neighboring states that have casino gaming,
Kentucky Downs faces no such pressure from Tennessee.
"We feel like we're in a good position, competitively, to offer
this type of wagering," Johnsen said.
Ellis Park owner Ron Geary said he would begin to analyze the
new wagering option following the conclusion of the meet there on
Sept. 5 and could add machines prior to the conclusion of the court
proceedings. Officials from Churchill Downs and Turfway Park have
said they will wait until legal proceedings are further along or
over before considering the addition of the new wager.

(Copyright 2011 by The Associated Press. All Rights Reserved.)