Slot Machines Based On Horse Races

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Slot Machines Based On Horse Races 2020
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In a unanimous decision announced Thursday that could result in a large cuts to purses in the state, the Kentucky Supreme Court ruled that Historical Horse Racing (HHR) Machines do not qualify as pari-mutuel wagering and are therefore illegal under state law.

The decision directly covered only one form of the machines, the Encore or Exacta system, but it appears that it will be applied to all forms and brands of HHR.

The plaintiff in the case was the Family Trust Foundation of Kentucky, a conservative group which describes itself as a foundation that “has stood as a continual bulwark for families and the values that make families strong.” The Family Trust Foundation appealed after losing its fight against the HHR machines in a lower court, the Franklin Circuit Court.

Majority Floor Leader and racing advocate Damon Thayer was quick to lash out at the court.

“It is a devastating decision made by a Kentucky Supreme Court that continues to deliver bad decisions,” he said. “It’s wrong. It’s irresponsible. If not remedied, this could be a devastating blow to Kentucky’s racing and breeding industries.”

Because casinos and slot machines are illegal in Kentucky, the HHR machines, which resemble traditional slot machines, were only allowed after receiving a green light from the Kentucky Racing Commission which authorized them on the basis of them being a form of pari-mutuel gambling. The Kentucky Supreme Court disagreed. In an opinion written by Laurance VanMeter, whose brother Tom is a Kentucky-based bloodstock agent, the court said it found that the machines do not meet the legal definition of pari-mutuel wagering because customers were not wagering “on the same discrete, finite events.”

“Because we hold that the Encore system does not create a wagering pool among patrons such that they are wagering among themselves as required for pari-mutuel wagering, the trial court misapplied the applicable regulation as a matter of law,” read the ruling.

WDRB.com’s report on the ruling included a quote from Kentucky Governor Andy Beshear, who said: “Historical horse racing is an important part of Kentucky’s economy that supports jobs and contributes over $21 million to the state budget. We are working with various partners to find a path forward.”

It was not immediately clear what steps would follow the ruling and when, but should the tracks be forced to shut down the HHR machines, it would be a huge blow to the industry. With the machines soaring in popularity, the state’s tracks have been able to substantially bump up their purses in recent years.

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Starting out at Kentucky Downs in 2011, the machines are now either at every Kentucky track or one of their satellite facilities. In July alone, the machines across the state handled $270 million, which resulted in gross commissions of 22,722,679. During the fiscal year that ended in June, the gross commissions on $2.2 billion in handle was $188.9 million, of which $15,577,748 went to the Kentucky Thoroughbred Development Fund.

“This decision is obviously devastating for everyone and is something that no one was expecting,” said Kentucky Equine Education Project Executive Vice President Elizabeth Jensen. “Several racetracks have made significant investments based on the success of Historical Horse Racing over the last few years. I think this blind sided pretty much everyone. It’s hard at the moment for everyone to get their arms around the long-term impact of this. Immediately, you have the hundreds of people working at HHR facilities that will be losing their jobs. The amount of money going to the purses will also be lost.”

Spokespersons for Kentucky Downs and Keeneland issued only brief comments Thursday, both saying they are evaluating the court decision.

Churchill Downs Vice President of Corporate Communications Tonya Abeln issued a statement making it clear that the racing and gaming company was exploring its options.

“CDI does not use the Exacta system in any of its HRMs in any facility in Kentucky,” she said in an email response. “We will work within our legal rights and in coordination with Kentucky legislators to ensure the ongoing legal operation of our HRM facilities in Kentucky so that we can continue to provide critical funding for the equine industry and support the citizens in the Commonwealth of Kentucky. Although CDI does not use the Exacta system in question at any of our HRM facilities, we appreciate Kentucky Governor Andy Beshear’s support of the industry in his statement regarding Historical Horse Racing today.”

Should the tracks be ordered to shut off the machines, it is not clear when that would happen.

With the highest court in the state having ruled against the HHR machines, the racing commission and the racing and breeding industries will likely have to look outside of the court system if they are to find a path to the keep the machines going. One avenue could be to craft and have legislation passed that would permit their use. In its ruling, the Court hinted at just that.

“If a change, however, in the long-accepted definition of pari-mutuel wagering is to be made, that change must be made by the people of this Commonwealth through their duly-elected legislators, not by an appointed administrative body and not by the judiciary,” the ruling read.

Jensen said it was too early for racing interests to have crafted a new plan of attack.

“What can we do? What can be done? Those are the questions of the day,” she said. “We are still researching that. We are working with the tracks, talking to legislators and people in Frankfort to try to figure out where do we go from here. I don’t think anybody has that answer yet.”

Introduction to Kentucky Slot Machine Casino Gambling in 2020

Kentucky slot machine casino gambling does not include games of chance, which are strictly illegal. Instead, Kentucky has competition-based electronic gaming machines at four out of its five pari-mutuel wagering racetracks.

Theoretical payout limits are not available but monthly return statistics are available for electronic gaming machines.

This post continues my weekly State-By-State Slot Machine Casino Gambling Series, an online resource dedicated to guiding slot machine casino gambler to success. Now in its third year, each weekly post reviews slots gambling in a single U.S. state, territory, or federal district.

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Relevant Legal Statutes on Gambling in Kentucky*

The minimum legal gambling age in Kentucky depends upon the gambling activity:

Slot Machines Based On Horse Races 2020

Land-Based Casinos: Not available
Poker Rooms: Not available
Bingo: 18
Lottery: 18
Pari-Mutuel Wagering: 18

Kentucky’s interpretation of legal gambling requires the competitor’s level of skill “must sufficiently govern the results.”

Therefore, competition-based games are legal as well as pari-mutuel wagering. Traditional slots are illegal, including those referred to as Class III, Vegas-style, and games-of-chance slot machines.

Kentucky has competition-based electronic games available in a few of their pari-mutuel facilities. These skill-based games are anonymously-based historical race results.

Historically, Kentucky has had a fascinating relationship with gambling. While casino gambling was never legal, gambling dens were prevalent before the Great Depression of 1929. To this day, the open display of illegal gambling from that time in American history continues to negatively affect the perception of gaming in Kentucky.

If you’re ever in Newport, directly across the Ohio River from Cincinnati, consider walking the Newport Gangster Tour.

*The purpose of this section is to inform the public of state gambling laws and how the laws might apply to various forms of gaming. It is not legal advice.

Slot Machine Private Ownership in Kentucky

In Kentucky, it is legal to own a slot machine privately.

Gaming Control Board in Kentucky

The Kentucky Horse Racing Commission (KHRC) regulates skill-based games at pari-mutual racetracks in the Commonwealth of Kentucky.

These devices are Historic Horse Racing (HHR) electronic gaming machines. The KHRC reports Kentucky offers 2,981 HHR machines.

Casinos in Kentucky

There are five pari-mutuel racetracks in the Commonwealth of Kentucky. Of these, only four sites offer skill-based HHR electronic gaming machines.

The largest casino in Kentucky is Derby City Gaming with 1,000 HHR gaming machines.

The second-largest casino is Red Mile Gaming & Racing, an HHR parlor in partnership with Keeneland Race Course, with 938 gaming machines.

Commercial Casinos in Kentucky

The four out of five of Kentucky’s pari-mutuel racetracks with skill-based HHR electronic gaming machines are:

Derby City Gaming in Louisville located 74 miles west of Lexington on the Indiana border.
Ellis Park Racing and Gaming in Henderson located 105 miles northwest of Bowling Green.
Kentucky Downs Gaming in Franklin located 29 miles south of Bowling Green.
Red Mile Gaming & Racing in Lexington.

Tribal Casinos in Kentucky

The Commonwealth of Kentucky has no federally-recognized American Indian tribes and, therefore, no tribal casinos.

Other Gambling Establishments

As an alternative to enjoying Kentucky slot machine casino gambling, consider exploring casino options in a nearby state. Bordering Kentucky is:

North: Indiana and Ohio Slots
East: West Virginia Slots
Southeast: Virginia Slots
South: Tennessee Slots
West: Missouri Slots

Each link above will take you to my blog for that neighboring U.S. state to Kentucky.

Our Kentucky Slots Facebook Group

Are you interested in sharing and learning with other slots enthusiasts in Kentucky? If so, join our new Kentucky slots community on Facebook. All you’ll need is a Facebook profile to join this closed Facebook Group freely.

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There, you’ll be able to privately share your slots experiences as well as chat with players about slots gambling in Kentucky. Join us!

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Payout Returns in Kentucky

The Commonwealth of Kentucky does not offer any theoretical payout limits for their competition-based HHR gaming machines.

The Kentucky Horse Racing Commission offers statistics for HHR gaming under Quick Links entitled Wagering on Historical Horse Races. Its December 2019 report indirectly offers actual return statistics including comparisons to past actuals.

To calculate a player’s win percentage from the report, divide Less: Return to Public by Total Handle. For December 2019, the monthly Player’s Win% for HHR machines were:

State-wide: 91.5%
Derby City: 90.9%
Ellis Park: 93.9%
Keeneland/Red Mile: 91.3%
Kentucky Downs: 92.0%

From this December 2019 report, Ellis Park had the highest player win% at nearly 94% while Derby City had the lowest at nearly 91%.

Summary of Kentucky Slot Machine Casino Gambling in 2020

Slot Machines Based On Horse Races Near Me

Kentucky slot machine casino gambling exists as competition-based, games-of-skill Historical Horse Racing (HHR) electronic gaming machines instead of games-of-chance slot machines.

No minimum or maximum theoretical payout limits have been set. Monthly return statistics are publicly available for each pari-mutuel racetrack with HHR games.

Annual Progress in Kentucky Slot Machine Casino Gambling

In the last year, Kentucky increased its HHR machines by 9% to 2,981 devices. However, the average daily handle for HHRs increased by 46%. For 2020 so far, it’s an amazing 59% increase compared to 2019.

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