More than a year after the Kentucky Supreme Court ruled that historical racing wagers can be regulated by the Kentucky Horse Racing Commission, former justice Will T. Scott said Thursday he isn't so sure, now that he's seen them in action.
Scott, who is now a Republican candidate for governor running on a platform to use casinos at racetracks to shore up the state's underfunded pension systems, said he was "shocked" when he visited Kentucky Downs in Franklin on Wednesday.
"I'd think I was in Reno," he said. "These are nothing but big banks and banks and banks of slot machines. ... We thought there were horses involved, and so the racing commission can regulate it. But these are ducks and chickens ... and these are slot machines. ... I do not believe this has anything to do with historical racing. And if it doesn't have anything to do with historical racing, then it's illegal."
In February 2014, the state supreme court, including Scott, unanimously ruled that historical racing, sometimes referred to as instant racing, could be regulated by the state racing commission, but the court sent the question of whether the games themselves truly are a form of pari-mutuel gambling back to Franklin Circuit Court.
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Franklin Circuit Judge Thomas Wingate has been presiding over discovery by The Family Foundation on how the games work, but virtually all of the records are under seal. The Family Foundation has long contended that the games are illegal.
The Family Foundation on Wednesday asked Wingate to recuse himself from the case because his son is seeking a summer job working for attorneys representing the racetracks.
Scott, who remains in favor of expanding gambling at tracks to generate revenue for the state, said he has been criticized for wanting casinos.
"You're getting casinos whether you want it or not, so you better have real casinos that Kentucky controls, under an appropriate commission. They're getting ready to flood Kentucky and we're not controlling them," Scott said. "Don't tell me we're not (having casinos), because I played it."
Scott said he feels the court was "misled" about the way the games work. The racetracks and the state have said players bet on previously run horse races, but Scott said he saw little evidence of that, or that the wagering is pari-mutuel, in which players bet against each other rather than the house.
"If we had been standing at Kentucky Downs, that day, looking at those machines, and they'd told us that, we'd probably have thrown them out of court," Scott said.
He said he thought it would be something akin to off-track betting or simulcasting.
"It has nothing to do with historical horse racing. I sat there in that case, thinking it was about historical horse racing. That's BS," Scott said. "That's mathematics, that's an algorithm."
Family Foundation attorney Stan Cave said Thursday that Scott may be right.
"In documents recently uncovered in the instant racing case, it appears that the outcome of wagering is determined by a random number generator, which is the hallmark of a slot machine," Cave said. "This contradicts representations made about how the gaming devices work by the advocates of instant racing. The outcomes of wagering are determined by a random number generator, not by the outcome of the horse race."
But Corey Johnsen, president of Kentucky Downs, disputed Scott's contention that horse races aren't involved.
Johnsen said he is shocked by Scott's comments and pointed to the website for Encore, which provides the games.
"The horse races are prominent. The handicapping information and official results are all there," he said. "You can't miss it."
An explainer video on Encore's site shows three animated representations of horse races on a screen across the top of the gaming terminal; the race winners, based on actual races, according to Encore, are used to determine the payouts rather than graphics on a lower screen, which often show animals spinning similar to reels on slot machines.
The new games, like the games previously provided by a company called RaceTech and still used at Ellis Park, have been approved by the racing commission.
Susan Speckert, general counsel for the racing commission, said the games went through extensive testing by an independent consultant.
"Gaming Laboratories International determined they are pari-mutuel wagers, where the winner is determined by the outcome of a horse race," she said.
Keeneland and The Red Mile, who are building a joint video gambling parlor in Lexington, have specified they will use RaceTech Instant Racing games.
John-Mark Hack, a vocal opponent of the Keeneland-Red Mile facility near the University of Kentucky campus, said that Scott's new opinion matches that of courts in Alabama, Texas, Oregon, Wyoming, Maryland, Illinois and Idaho.
"Justice Scott reached the same conclusion that legal authorities in every other state in the United States that have considered this issue have reached: that these machines are not pari-mutuel wagering," Hack said. "Which means that these machines are illegal, and hopefully the Franklin Circuit Court will reach the same conclusion."