Kentucky Commission adjusts rules to agree with recently passed historical horse racing bill

LEXINGTON, Ky. - The Kentucky Horse Racing Commission on Tuesday passed a raft of amendments to its existing regulations to bring those rules into alignment with a bill recently passed by the state legislature allowing for the continued operation of historical horse racing devices.

Many of the changes were approved on an emergency basis in order to allow the amendments to go into effect when the bill is signed by Gov. Andy Beshear. Because of an extended recess by the state Senate, the bill is not expected to be forwarded to Beshear until next week, but the governor appeared in front of the commission at the start of its meeting on Thursday to assure the commission that he would sign the bill into law immediately after he receives it.

The bill changes certain definitions in the state’s racing laws for “pari-mutuel” wagering and licensed racing facilities, and Jennifer Wolsing, the legal counsel for the KHRC, told commissioners that the changes to racing regulations were “necessary and prudent” for the rules to be aligned with the bill’s language and allow racetrack licensees to continue to operate the machines. The changes were approved unanimously, contingent on Beshear signing the legislation.

Although the Kentucky Supreme Court issued an opinion in September of last year that a type of machine in use at state racetracks did not fit the state’s definition of pari-mutuel, casinos at five locations in the state remained open for all of last year due to the Supreme Court’s directive for a lower-court to reissue its opinion in the case.

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However, late in January this year, citing uncertainty over the legality of the machines, the operators of a casino at The Red Mile in downtown Lexington closed their facility. It was reopened last Sunday, after the Thursday night passage of the bill in the House.

Beshear, a Democrat in a heavily red state who pledged to support any legislation allowing for the continued operation of the devices, used his opportunity in front of the commission to thank the state’s horsemen and breeders for supporting the efforts to get the bill passed. However, he cautioned that he would hold the state’s racetracks to their promise of working on changes to the tax regulations governing the machines to allow for more revenue to flow to the state, which he said was critical to getting the bill over the finish line.

“It took that promise to get it through, and we’re going to hold everyone to that promise,” Beshear said.

The KHRC also approved a request by Kentucky Downs on the southern border of the state to open an “extension facility” within 60 miles of its present location. That location will offer full-card simulcasting and “exotic wagers which have yet to be determined,” a euphemism for historical horse racing machines.

Churchill Downs already has plans to build new casinos at its Turfway Park in Northern Kentucky and at its flagship racetrack in Louisville. In addition, Keeneland has partnered with Kentucky Downs on a new multi-breed facility in Corbin that is expected to start construction late this year. With the new Kentucky Downs facility approved Tuesday, the state would eventually have nine HHR locations.

During the last fiscal year, which ended in June of 2020, total handle on the HHR machines in the state was $2.26 billion. Waqas Ahmed, the commission’s pari-mutuel director, said at the Tuesday meeting that for the first six months of the current fiscal year, handle on the machines is up 23 percent compared to the same period in the previous fiscal year.

* In other commission actions at the meeting, the KHRC allowed Keeneland to drop its April 1 live race date, a Thursday, from its approved dates, citing Keeneland’s request to start its meet on a Friday, as is typical for the Lexington track.

The commission also unanimously approved a change to its withdrawal guideline of seven days for the tranquilizer fluphenazine, extending it to six months. The change was necessary, according to Bruce Howard, the commission’s equine medical director, because of new scientific evidence showing that fluphenazine can be detected “many weeks, even months” after administration.