(The Center Square) - The Kentucky Horse Racing Commission plans to ask the state’s Supreme Court to reconsider a recent opinion it gave on historical horse racing, but the KHRC also wants more time to draft its request.
The regulatory body filed its motion for an extension last week with Kentucky’s top court. Lexington racetrack Keeneland made a similar request Wednesday.
Two weeks ago, the Supreme Court issued a unanimous opinion that a specific HHR system operated by Exacta Systems did not adhere to state law on pari-mutuel betting. State law gives parties 20 days to seek a rehearing, but the commission, citing the complex nature of the HHR case, wants two more weeks.
“Because of this lawsuit’s extremely voluminous history; its presentation of especially complex questions; and its potentially widespread impact upon Kentucky’s signature industry, it would be exceedingly difficult for the KHRC to craft and submit a satisfactory Petition for Rehearing within the 20-day time period,” the motion read.
HHR runs on machines that look like slot machines but when a bettor makes their wager, they’re actually betting on the outcome of previously run races.
The machines have been in operation at Kentucky tracks for more than nine years, but throughout that time, the issue has also been going through the court system since the KHRC, an unelected body, first approved HHR. Until last month’s decision, the courts had always sided with the commission and the tracks.
The Family Foundation of Kentucky has been the organization pushing the issue in the courts. In its arguments, the foundation has raised concerns an unelected body has approved a new form of pari-mutuel betting without legislative approval and the machines do not conform to state laws on pari-mutuel betting.
In issuing its opinion, the justices ruled the current case should go back to the local court in Frankfort. While only Exacta Systems HHR system is mentioned in the case, the ruling could potentially affect other systems currently in use in Kentucky as well.
Even with the court’s opinion, the KHRC has allowed HHR to continue at tracks and parlors statewide. Exacta Systems also said it has been working on a solution it plans to present to the KHRC that would enable its machines to operate under the opinion given by the court.
Since 2011, more than $8.5 billion has been bet at HHR parlors across the state. During the 2019-20 fiscal year, nearly $2.3 billion was wagered, which represented an 11.3 percent increase from the previous year. That total would have been higher, but COVID-19 forced the parlors to close for nearly three months.
Last year, the state’s four parlors took in net revenues of $156 million and produced excise taxes of nearly $33.9 million. Of that, $15.2 million went to the state’s general fund. Tracks use the proceeds to supplement purses for live racing, which helps them attract higher quality horses and more entries for races. That in turn leads to increases in betting on live racing.
The tracks have been bullish on HHR as they’ve invested in expanding existing facilities and opening new ones. Within the past month, Churchill Downs has opened new venues in the western and northern parts of the state. In addition, Keeneland and Kentucky Downs have proposed building a harness racing track and a satellite facility in southeastern Kentucky, with both venues hosting about 400 HHR machines each.