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VOL. 35 | NO. 43 | Friday, October 28, 2011

Racing machines paying off for Kentucky Downs

Controversial slot-like devices give track a casino feel

By Hollie Deese

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It might look like a Las Vegas casino full of slot machines, but these devices at Kentucky Downs enable gamblers to bet on past horse races using handicapping information that excludes when the race was run, as well as the names of horses and jockeys, until the bet is made.

-- Ap Photo/Ed Reinke

FRANKLIN, Ky. – The land Kentucky Downs occupies first drew Tennesseans across the border in the 19th Century when men made the journey north to settle differences with a duel – illegal in Tennessee but perfectly fine here.

When the dueling stopped, the land was relatively quiet until the 1980s when a group of investors acquired the property to develop a unique, turf-only race track to host Steeplechase races. Dueling Grounds race track began hosting races in April 1990.

“Kentucky Downs is the only turf-only track in the United States,” spokesman Bill Flesher says. “The track has operated as a small part of the Kentucky racing circuit for 20 years and has had simulcast racing on TVs from other tracks in the US and North America and even overseas. It has gone through some ownership changes in its history and, in 2007, the current investors – two of whom owned a horse who raced here – saw it, loved it, saw the potential for it and bought the track.”

Perhaps the biggest change at the property – an even bigger lure to Tennesseans than pistols-at-dawn – are the six-week-old slot machine-like devices that delivers legal gaming within 0.3 miles of the Tennessee border and 38 miles from downtown Nashville.

Not surprisingly, the parking lot was full of cars with Tennessee license plates during a recent afternoon at the track.

The 200 machines, based on a pari-mutuel wagering system using past horses races, look like slot machines you would find at any lively casino. But they are not slot machines, as Flesher is quick to point out.

“It has always been in the back of folks mind that should expanded gaming ever come to Kentucky, it would come to the race tracks because it would be an opportunity to bolster the racing industry, as has been done in other states,” Flesher says. “Lots of other states have done this whereby new gaming – electronic gaming, machine gaming, expanded gaming – has come to a lot of these race tracks to help the horse racing industry.”

How it works

The Instant Racing machines are a series of pari-mutuel terminals that offer wagering on more than 21,000 digitized videos of historic races.
Players pick a machine and are provided handicapping information for each race that they can use to make their picks. The names of the horses and jockeys, as well as the date and the track where the race was run, are hidden from the player until after their selections have been made.
Once a player has selected three horses and made a wager, the player may view a replay of the full race or an abbreviated replay of the “stretch run” of the race.
Winners receive graduated payoffs by correctly selecting the first three finishers in the historic race in order, the first three in any order, the top two finishers, the winner or any two of the top three finishers.
All Instant Racing wagering is operated through a tote system that operates the same as the tote system used in all “live” horse racing, in that all wagers are aggregated and assigned to their proper wagering pool. Wagering is pari-mutuel because players bet against each other and do not wager against “the house.” 

Expanded racing for the state has long been lobbied by groups like the Kentucky Equine Education Project because the wagers have contributed millions of dollars to race purses in states such as Arkansas. And for a track like Kentucky Downs, which hosted live racing at just one four-day event this year, that can make a big difference for the bottom line

“Churchill Downs may have a race that is a race on dirt for a certain category of horses based on their accomplishments with a $25,000 purse,” Flesher says. “That same race in Pennsylvania may go for $40,000 because of the influx of gaming race dollars into the purse structure. It puts Kentucky and Kentucky tracks at a disadvantage.”

Flesher says the track has made 85 new hires as a result of new business generated by the machines. More than 500 people showed up at the job fair that resulted in those hires.

Not everyone sees the machines as a boost for the state. Some look at these new machines as no different from slot machines, which are illegal in Kentucky and Tennessee.

The game is under legal review in the Kentucky Court of Appeals after the Family Foundation of Kentucky asked the Kentucky Court of Appeals to put an immediate stop to instant racing at Kentucky Downs, against its initial approval, after seeing pictures of the machines in place. The injunction was denied, but it could be next year before there is a final ruling in the case.

Flashy and bright, the machines are the first of their kind in the state and only the second in operation in the country. And the room’s similarity to a Las Vegas casino can’t be denied.

But neither can the appeal of boosting horse racing in Kentucky. The track is not releasing figures yet, but the total handle at Kentucky Downs Sept. 1-19, including the handle from the new instant racing machines, was 176 percent greater in 2011 than the same period in 2010.

“A lot of stallions have left the state to breed elsewhere because breeding incentives are higher in other states,” Flesher says. “This is the first step to really helping the racing industry here. It is not the panacea, it is not the cure all, but it is a very tangible – and over time – a substantive step to help invigorate Kentucky’s signature industry.”

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