Kentucky appeals court vacates Instant Racing ruling

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Kentucky’s Court of Appeals, in a 2-to-1 decision, has vacated and remanded a December 2010  Franklin Circuit Court decision permitting Kentucky racetracks to conduct wagering on historical races, also known as Instant Racing. The machines were originally created for Oaklawn Park in Hot Springs, Ark., and are considered a pari-mutuel alternative to VLTs or slot machines in states that have not authorized expanded gambling. Kentucky Downs in Franklin is the only Kentucky racetrack to install the machines to date, though Ellis Park in Henderson had previously been given permission by the Kentucky Horse Racing Commission to proceed with Instant Racing.

The decision was rendered today by Judges Joseph E. Lambert and Janet L. Stumbo, who found that the lower court erred in not permitting the Family Foundation – which filed suit to block Instant Racing  – discovery during the trial to explore how the payoffs for Instant Racing were computed.

“We agree that the parties  had a right to develop proof and to present evidence to establish that the wagers made by patrons at electronic gaming machines do or do not meet the definition of pari-mutuel wagering on a horse race,” the majority opinion states. “These are complex questions, and the parties are entitled to ample discovery in an effort to present the evidence. We conclude that the request for discovery by Family Foundation was relevant and necessary to the court’s determination and that the court’s denial of discovery constituted an abuse of discretion.

“By virtue of the absence of any discovery, the record before us is without a meaningful evidentiary basis to support the judgment of the trial court. Appellate review is thus impossible. As such, we are unable to address the merits of the remaining issues. Accordingly, the judgment of the Franklin Circuit Court is vacated and this cause remanded for further proceedings not inconsistent herewith.”

Judge Sara Walter Combs wrote a dissenting opinion, examining specifics of the Family Foundation complaint. Her belief is that “historic races clearly fall within the scope and rules of pari-mutuel betting” because money from bettors is being pooled.

“In summary,” Combs wrote, “I would affirm the ruling of the Franklin Circuit Court that the historic racing regulations are a legitimate exercise of the authority of the Kentucky Horse Racing Commission and that they constitute pari-mutuel wagering.”

According to statistics provided by the Kentucky Horse Racing Commission,  $15.7 million was wagered on Instant Racing at Kentucky Downs in May, with $14.4 million returned to the public in winning bets. Total commissions were $1,285,991, with Kentucky Downs receiving $1,050,348 in net commissions. Fourteen percent of the net track commission, or $147,048 go into the purse fund, and $10,503 (1% of net) to a breeders incentive fund. 

From Sept. 1, 2011, through May 31, 2012, a total of $97.7 million has been wagered on Instant Racing in Kentucky. From that amount, net track commission totaled $6,782,578, with purses receiving $949,561 and the breeders incentive fund  $67,825. Wagering has increased every month since the machines were first installed at Kentucky Downs in September, with the exception of April, when wagering dropped by about $850,000 from March levels.

The court did not order the machines now in operation at Kentucky Downs to be shut down.

Kentucky Downs issued the following statement in the wake of the Court of Appeals opinion: “Today’s ruling in no way changes the position of Kentucky Downs that pari-mutuel wagering on historical racing fully complies with the law. Kentucky Downs will continue to operate Instant Racing under the regulatory authority of the Kentucky Horse Racing Commission whose regulations remain in full force and effect.

“At a time when the Kentucky horse industry is at a competitive disadvantage with other racing states, Instant Racing has generated nearly $2 million for purses and breeders’ awards.  As Kentucky Downs continues to operate Instant Racing, we take very seriously our role in improving the economy and creating jobs and look forward to our race meeting in September when we will offer record purses and breeders’ awards.”

Court of Appeals opinion

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  • dan

    Not sure why but the bible thumpers in Ky are determined to ruin Ky racing. Between this and trying to ban raceday lasix racing in Ky is doomed, trainers and owners stop fighting and just move to Indiana and Ohio.

    • ace

      If someone could answer that question we would all sleep better.

    • Clipka

      The thumpers want to make sure the believers have money to put in the Sunday basket and have not lost it at the races.

    • Barney Door

      Good idea.  The purse structure in Ohio is so lucrative, I don’t know why everyone hasn’t moved already.

    • http://Bellwether4u.com James Staples

      right wing bible thumpers would BOO a cancer cure!!!…thats why we call them “THE NO NO PEOPLE”…all that comes out their mouth is BS…ty Dan…

  • dan

    Not sure why but the bible thumpers in Ky are determined to ruin Ky racing. Between this and trying to ban raceday lasix racing in Ky is doomed, trainers and owners stop fighting and just move to Indiana and Ohio.

  • ace

    If someone could answer that question we would all sleep better.

  • Concerned Observer

    The religious right is an interesting group, not prone to consistent logic. They don’t want anyone telling them how to live, and are vehement in their dislike for legal restraints; except for things they don’t believe in, such as Sunday liquor sales, and gambling. They abhor the mideastern nations insistence that people live by and observe the majority’s religious law….then try to do the same thing here based on their own beliefs.

    And they vote…which is not lost on the states politicians.

    • Randy Aynde

      Yes …far left very consistent with their logic as well. Down with corporate influence unless it’s  money from a corporation controlled by a labor union. Unlimited choice to abort a fetus but establish a system that puts the government in charge of all medical decisions.

  • Concerned Observer

    The religious right is an interesting group, not prone to consistent logic. They don’t want anyone telling them how to live, and are vehement in their dislike for legal restraints; except for things they don’t believe in, such as Sunday liquor sales, and gambling. They abhor the mideastern nations insistence that people live by and observe the majority’s religious law….then try to do the same thing here based on their own beliefs.

    And they vote…which is not lost on the states politicians.

  • Clipka

    The thumpers want to make sure the believers have money to put in the Sunday basket and have not lost it at the races.

  • Barney Door

    Good idea.  The purse structure in Ohio is so lucrative, I don’t know why everyone hasn’t moved already.

  • http://Bellwether4u.com James Staples

    right wing bible thumpers would BOO a cancer cure!!!…thats why we call them “THE NO NO PEOPLE”

  • Randy Aynde

    Yes …far left very consistent with their logic as well. Down with corporate influence unless it’s  money from a corporation controlled by a labor union. Unlimited choice to abort a fetus but establish a system that puts the government in charge of all medical decisions.

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