When a horse race is recorded and then bet on later via a slot machine-like device is it still a horse race? Or a type of illegal gambling?
The Kentucky Supreme Court is wrestling with that question after hearing nearly two hours of arguments Wednesday about the legality of historical racing, known as Instant Racing. The justices quizzed attorneys for the Kentucky Racing Commission, multiple race tracks and The Family Foundation of Kentucky about what constitutes a horse race and legal pari-mutuel betting.
"How can you make the determination of the validity if you don't know what historical racing is?" Justice Bill Cunningham asked.
Instant racing allows patrons to bet on past races without knowing the names of the trainers, jockeys or horses involved. Kentucky Downs in Franklin and Ellis Park in Henderson each offer the game.
The high court case focuses on whether Instant Racing is a pari-mutuel game, like horse racing, or more like slot machine gambling, which is not allowed in Kentucky. The court is also trying to decide whether the Family Foundation, which is challenging the legality of the game, got access to all the pre-trial information to which it was entitled.
Kentucky defines pari-mutuel racing as patrons betting among themselves and not against an association, with the net wagering pool returned to the winning patrons. Kentuckians are allowed to bet on horse racing, bingo, pull-tabs and lotteries, but lawmakers have resisted opening the state to other forms of gambling.
The high court did not say when it would issue a decision.
Attorney Stan Cave, arguing on behalf of The Family Foundation, told the justices that other states, including Maryland, Oregon and Wyoming, have rejected the contention that historic racing qualifies as pari-mutuel betting.
"We all know this is a slot machine. They're betting no one is willing to say so," Cave said, referring to the tracks and the Kentucky Racing Commission.
Peter Ervin, an attorney for the racing commission, said the commission regulates historic racing under the same power as it does standard pari-mutuel racing at tracks such as Churchill Downs or Keeneland.
Justice Will T. Scott noted that tracks have boards visible to the public showing the odds for each race. He asked how a bettor at a historic racing machine knows the odds on the race if he doesn't know which horses and jockeys are running and what the track conditions are.
"I'm trying to envision this type of calculation ... is this thing just rolling over like a slot machine and it piles up until somebody gets it?" Scott asked. "That's the problem I'm having."
Ervin said the machines list the odds from the day the race was run. Kentucky's regulations require the approximate odds to be posted at the game terminal every 90 seconds.
"That same payout information you are used to seeing on the tote board at the track is available to this patron," Ervin said.
The case has bounced around the court system for several years. In December 2010, Franklin Circuit Judge Thomas Wingate upheld a proposal allowing tracks to accept pari-mutuel bets on rebroadcasts of the old races.
Beshear's administration, along with horse track executives, sought the ruling on the legality of the regulations for Instant Racing, which was adopted by the Kentucky Horse Racing Commission. The Family Foundation of Kentucky argued that Instant Racing does not meet the state's legal definition of pari-mutuel wagering on horse races. The group also challenged how wagers are pooled, odds calculated and whether the state could collect taxes from the games.
Kentucky Downs, which will host five days of live racing, has historical-race wagering machines that take in about $18 million to $20 million in wagers per month. Ellis Park takes in about $2 million a month in historical-race wagers. It opens July 4 for a 29-day live racing meet.
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