08/31/2011 1:42PM

Red Mile shows interest in adding Instant Racing slot machines


The Red Mile, a harness track in downtown Lexington, Ky., has received approval from the state for tax subsidies related to a redevelopment that would include a facility for gambling machines, but track officials have said they will wait for a ruling from a state appeals court on the legality of the machines before applying for a license.

Last week, the state granted the Red Mile $25.3 million in so-called “tax-increment financing” for the proposed redevelopment, which, in addition to the casino, would include the construction of apartments, a hotel, and retail and restaurant space. Under the plan, the state would forgive $25.3 million in tax revenue that it would otherwise collect if the redevelopment proposal proceeds as planned.

The Red Mile is the third racetrack in Kentucky to express an interest in installing slot machines under rules passed last year by the Kentucky Horse Racing Commission authorizing gambling machines that use the results of previously run races to determine random payouts. The machines are currently in use in Arkansas.

In June, the racing commission approved an application by Kentucky Downs to install the machines. The track, which is located in Franklin, Ky., near the border with Tennessee, was scheduled to open a parlor with 200 machines on Thursday, and it plans to expand the number of machines over the next several months.

The legality of the machines is currently being challenged by an anti-gambling group, the Family Foundation, which has argued that the machines violate a Kentucky constitutional prohibition on any gambling other than horse racing or the lottery. A ruling in the challenge is expected later this year.

The Red Mile’s president, Joe Costa, said that the track will not apply for a license for the machines until the ruling. Roughly half of the tax-increment financing subsidy rests on the development of the casino.

One other racetrack, Ellis Park in western Kentucky, has expressed interest in applying for a license. The owner of the track, Ron Geary, has said that the track will make a decision on an application later this year.

Both Churchill Downs and Keeneland, which is also in Lexington, have been lukewarm to the machines. On Wednesday, a Keeneland spokesman, Vince Gabbert, said that the track would not make any decision on whether to apply for a license for the machines until the court issues its ruling. Gabbert also said that the Red Mile’s plans were not currently influencing Keeneland’s position because both tracks are waiting on the court ruling.