FRANKFORT — A judge said Tuesday he will decide before the end of the year whether bets on previously run horse races are legal, which could open the door to new electronic gambling at Kentucky racetracks next year.
But Franklin Circuit Judge Thomas D. Wingate's ruling might not be the last word: both sides indicated they are likely to appeal the case to the Kentucky Supreme Court if they lose.
At a hearing Tuesday, the Kentucky Public Protection Cabinet, the Department of Revenue and the state's eight racetracks argued that wagers on "historical races" are legal and that the Kentucky Horse Racing Commission has the authority to regulate them.
The Family Foundation, a conservative advocacy group that intervened in the case, argued that such gambling is illegal.
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The state and the tracks filed a request in July for a legal ruling after the racing commission approved new rules to let the tracks install games such as Instant Racing, an electronic form of gambling with many similarities to slot machines.
Separately, the new regulations were scheduled to go before a legislative committee Tuesday afternoon, but the review was delayed. Lisa Underwood, executive director of the racing commission, said legislators had indicated they wanted to wait until Wingate ruled.
In Instant Racing, which was pioneered at Oaklawn Park in Arkansas, patrons bet on the outcome of races that already have been run. The bettors may look at some past performance information, but they don't know the track or the jockey. Each player bets on an individual race drawn from a bank of thousands, but the money goes into a common pool of potential winnings.
"The questions are pretty straightforward — is it pari-mutuel wagering? Yes. ...Patrons wager against themselves and not the house," said Hollie Hopkins, an attorney for the Public Protection Cabinet.
Hopkins said the racing commission's broad regulatory authority gives it the power to write rules allowing the bets.
"Obviously, there are differences (between historical racing and live racing), but that doesn't alter the fundamental characteristics," Hopkins said.
She argued that the racing commission's statutory mission requires it to regulate, foster and promote horse racing, breeding and pari-mutuel wagering.
"It's no secret to the court and probably anyone in the commonwealth that the horse industry is facing some serious difficulties at this time," Hopkins said.
The new form of gambling was implemented by the commission as a way to help tracks boost purses to attract more horses to race, she said.
However, Stan Cave, an attorney for the Family Foundation and a former state legislator, argued that the commission is attempting an end-run around the General Assembly.
"This is nothing more than video slot machines," Cave said. "They want to say a video is a horse race. It isn't."
A bill to allow Instant Racing died in the Senate earlier this year, and previous attempts to expand gambling to allow electronic slots have failed as well.
"These terminals are prohibited gambling devices," Cave said.
He also argued that the bets are not truly pooled because each bettor is wagering on a different race.
But William Lear Jr., an attorney for Keeneland, Ellis Park in Henderson and Players Bluegrass Downs in Paducah, said a pool on different historical races is no different from the carryover on bets such as a Pick Six.
With the Pick Six, if no one picks the winners of all six races, most of the money carries over to fatten the potential winnings the next day. So players might win money from races they didn't bet on, he said.
"These are not slot machines, these are not video lottery terminals. This is pooled wagering within the accepted definition," Lear told Win gate. "We're finding another way to support an industry that badly needs it with its own product."
Several Kentucky tracks appear ready to embrace the new form of gambling, although many say they don't expect it to be as lucrative as video lottery terminals would be.
Given a favorable ruling by Wingate, Corey Johnsen, president of Kentucky Downs in Franklin, said he plans to put hundreds of machines in his track's existing betting facilities once the games get regulatory approval.
"As soon as possible," Johnsen said. "We are at a tremendous competitive disadvantage. This is the perfect solution to our short-term problem."