Keeneland is scrapping plans for its on-site expanding gambling venture and instead will team with The Red Mile to open an instant racing parlor near downtown Lexington.
The two tracks received approval in April to offer historical wagering and announced plans to build multimillion-dollar venues on their grounds.
But after Keeneland won the Breeders' Cup for 2015, the Thoroughbred track postponed construction, originally planned for a large tailgating area known as "the Hill."
On Wednesday, the two tracks released a statement saying that instead, they will open a joint venture with 1,000 terminals at The Red Mile.
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The $30 million plan will have to be reviewed by the Kentucky Horse Racing Commission, but a statement from the tracks said they project an opening date in September 2015.
Kip Cornett, spokesman for both tracks, said updated plans will be filed soon with the racing commission.
Keeneland changed plans because "bottom line, it was the best business decision overall," Cornett said. "They sat down and determined this was the best course of action both for the Thoroughbred industry and for the city of Lexington."
Revenue from the venture will be split 50-50 between the two tracks for purse revenue for Thoroughbred and harness races, Cornett said.
The two tracks said earlier this year that they anticipated annual revenue from historical wagering of more than $40 million each. Although the number of terminals planned now is slightly smaller than the 1,100 approved by the racing commission in April, Cornett said projections are the same.
"This is an exciting announcement for the Horse Capital of the World and for the ongoing growth of Lexington," Joe Costa of The Red Mile said in a statement. "By making this pari-mutuel wager available in Fayette County, our state's signature industry can enjoy the financial benefits of a crucial new revenue stream for not just owners and breeders, but also the entire horse industry."
Keeneland Association chief operating officer Vince Gabbert released this comment: "There have always been two driving considerations behind decisions made by Keeneland, and that is the health of the Thoroughbred industry and our local community. We feel the best course of action for both our key constituencies is a facility at The Red Mile. Our belief is that the benefits of a more centrally located and fully dedicated facility outweighs locating this wagering option on our property."
In April, The Red Mile announced plans for a $25 million, 40,000-square-foot gambling parlor with 500 machines on the front of its grandstand.
Cornett said Wednesday that now plans call for a bigger building and for a complete renovation of the existing Red Mile grandstand.
"What they're looking to do is redo the consumer-facing side of the facility, and it will eventually be a brand-spanking-new grandstand area," Cornett said. "This will be redoing a facility that has not had much investment in the last decade, and it will get a major face lift."
The tracks plan to hire a partner to operate the instant racing parlor, which is expected to create 100 construction jobs and about 150 other jobs when operational.
Keeneland originally had planned to have Full House Resorts operate its Lexington historical wagering parlor. But Gabbert announced Tuesday that Keeneland is dropping Full House from a partnership deal in efforts to buy the assets of Thunder Ridge and move them to Corbin.
Also Wednesday, Las Vegas-based Full House announced that it is putting itself up for sale; a group of dissident shareholders has been trying to seize control of the company.
The tracks moved forward after the Kentucky Supreme Court sent a challenge on the legality of betting on previously run races back to Franklin Circuit Court.
The conservative Family Foundation has argued that the bets are not pari-mutuel and are thus illegal. The case is in discovery, with no date set for retrial.
"I'm frustrated," said Kent Ostrander, executive director of the Family Foundation. "The lack of transparency and the continued cover-up continue to frustrate our efforts to obtain discovery. After two attorneys general and two courts from other states held instant racing to be illegal, the tracks and public agencies filed this lawsuit to adjudge their legality in Kentucky.
"Yet, they are expanding the use of these devices before their own lawsuit is complete. This does not pass the smell test."
Other Kentucky racetracks, including Churchill Downs in Louisville and Turfway Park in Florence, told the racing commission earlier that they are considering adding terminals.
At Kentucky Downs and Ellis Park, the only two Kentucky tracks with this form of electronic gambling, betting on historical wagering in September was almost $30 million.