A History of Gambling Expansion in Kentucky

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Before 1881

  • The General Assembly “could grant charters to private organizations to conduct lotteries as a means of funding public works such as roads and schools.”{{Kentucky Legislative Research Commission, Compulsive Gambling in Kentucky, Research Report No. 316, (Frankfort, KY: 2003), 10.}}
  • Labor groups across the nation opposed lotteries and similar forms of gambling because it exploited their class.{{James C. Klotter, “Two Centuries of the Lottery in Kentucky,” The Register of the Kentucky Historical Society 87, no. 4 (1989): 410, https://www.jstor.org/stable/23381965.}}

     

1881

  • For the first time in Kentucky pari-mutuel wagering was defined in law in the case Commonwealth v. Simonds.
  • The essential elements of pari-mutuel wagering: “patrons wagering on a particular horse race, creating the pool, and setting the odds, with the winners sharing the pool, less the pool operator’s commission.”{{The Family Trust Foundation of Kentucky v. The Kentucky Horse Racing Commission (2018), 7n9, https://law.justia.com/cases/kentucky/supreme-court/2020/2018-sc-0630-tg.html.}}

1891

  • The newly adopted Kentucky Constitution prohibits gambling by lottery and, by the interpretation of Kentucky courts, all forms of gambling except pari-mutuel wagering (Section 226).

1931

  • The Kentucky Court of Appeals upheld a statute permitting pari-mutuel wagering on horse races.

1980

  • Pari-mutuel wagering was permitted “only upon the licensed premises and on the dates and hours for which racing has been authorized by the commission.”{{Ibid., 11. See also KRS 230.361(1) (1980).}}

1982

  • The horse industry began to lobby the General Assembly to loosen restrictions on wagering.
  • Horse racing pari-mutuel wagering was expanded by the General Assembly to include simulcasting, intertrack, international, and interstate wagering.{{Kentucky Revised Statutes 230.3751-230.804.}}

1988

  • Kentuckians voted to approve a constitutional amendment to allow for the establishment of a state lottery.{{LRC, Compulsive Gambling in Kentucky, 10.}}

1989

  • The first legally authorized lottery is held in nearly a century.

1992

  • The General Assembly amended the Constitution to permit charitable gaming. This would include bingo, pull tabs, raffles, non-cash prize wheels, etc.

1994-2009

  • Numerous bills were proposed to the General Assembly to permit casino-style gambling in the commonwealth, particularly at horse tracks, but to no avail.

2010

2011

  • Kentucky Downs in Franklin, KY introduces HHR gaming.


2012

  • Ellis Park in Henderson, KY introduces HHR gaming.


2014

  • The Kentucky Supreme Court ruled that the KHRC acted legally in changing the regulations for “historical racing,” but didn’t determine the nature of the machines.

2015

  • Red Mile partners with Keeneland in Lexington, KY to introduce HHR gaming.

2018

  • Franklin Circuit Court judge ruled that HHR is a form of pari-mutuel wagering
  • Churchill Downs Inc. opens Derby City Gaming to introduce HHR gaming in Louisville.

2020

  • The Kentucky Supreme Court overruled the 2018 Franklin Circuit Court decision. The Court
    ruled that HHR machines, which use the Encore Software, is not a form of pari-mutuel wagering and is unconstitutional. This ruling jeopardizes almost all HHR gaming facilities, except for Derby City Gaming in Louisville which uses a different system.
  • The KHRC will seek a new alternative in the HHR software to comply with the ruling. Exacta Systems is in the process of creating a new system and will present this to KHRC in the near future.{{Steve Bittenbender, “Kentucky Racing Officials Want State Supreme Court to Reconsider HHR Ruling,” Casino.org, October 8, 2020, https://www.casino.org/news/ky-racing-officials-want-state-supreme-court-to- reconsider-hhr-ruling/.}}
  • A few bills are introduced for the 2021 General Assembly to permit casino gaming (BR 80), sports wagering and online poker (BR 364), etc.

2021

  • SB 120, which redefines pari-mutuel wagering to include HHR, is passes legislature. HHR becomes legal with Gov. Beshear’s signature.

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