Director, Commonwealth Policy Center

Kentucky Supreme Court Set to Hear Gambling Case
by Richard Nelson

Tomorrow the Kentucky Supreme Court will hear oral arguments on the legality of instant racing devices. Proponents argue they’re simply another way for patrons to bet on horses and provide a new revenue stream to the state. Opponents say they’re illegal video slot machines designed to separate players from their cash as quickly as possible.

The Kentucky Horse Racing Commission (HRC) authorized the devices at Kentucky tracks in 2010 and determined that the activity is pari-mutuel, which means a pool of gamblers are betting against other gamblers on previously run horse races. Pari-mutuel wagering is the only form of betting, other than the Kentucky Lottery, that’s legal in the Commonwealth.

Instant racing, or historical horse racing, is predicated on the idea that participants are gambling on previously run horse races. But who would gamble on an old race where the outcome is already known? The lead attorney for opponents of instant-racing, Stan Cave has argued that the Kentucky Horse Racing Commission was wrong to introduce slot machines at the tracks and that their previous efforts to legitimize slot machines undermine their case for unilateral authorization.

The consensus has been that slots are illegal under Section 226 of the Kentucky Constitution. During the first decade of the 2000s, horse interests formed an advocacy group called the Kentucky Equine Education Project (KEEP). The goal was to change public opinion about expanded gambling and amend the constitution. The group later morphed into Kentucky Wins! and their mantra “Let the People Decide” tapped democratic impulses and made many promises about what a new revenue stream could do for the state. In the end, their expensive campaign failed to move the needle, so Gov. Steve Beshear’s Horse Racing Commission single-handedly decided that instant racing was their exclusive right to institute all along.

As of December 2800 slots peppered the state from Ellis Park and Kentucky Downs in Henderson and Franklin to Kentucky Derby Gaming and the Red Mile in Louisville and Lexington respectively.  The HRC authorized an additional 7000 machines that will become operational within the next 18 months. The latest development is underway in Oak Grove, less than 20 minutes from my home. It’ll have an additional 1200 machines in place soon. It’s worth noting that construction remained at a feverish pace during the pandemic and early reports indicated workers didn’t practice social distancing or wear PPE.

So what’s the nature of instant racing machines? Yukon Willie’s Gold Rush was one such device at Kentucky Downs a few years ago where you’d put your money in, press a button, and if five of a kind came up on the reel, bells and whistles indicated you hit the jackpot. Yukon Willie also features a very short video of the last seconds of a horse race in the upper corner.  Kentucky’s Horse Racing Commission will argue that people are really betting on a horse race. Call them what you will, but instant racing machines look identical to video slot machines.

In the age of COVID, we’re learning that details matter. Tiny unseen things can cause chain reactions. We’re told to abstain from certain behaviors out of love and concern for others. This is good advice regardless of the circumstances.

The Kentucky Supreme Court should drill down on the Constitution to determine why casino-style gambling was made illegal in the first place and whether instant-racing is just a palatable way to get Kentuckians to accept Las Vegas-style slots. Will the Court impartially ask whether video slots improve the well-being of a community? Or will the Court find they’re a social contagion that preys on the human weakness of those predisposed to addiction?

Details matter in pandemics as much as they matter regarding our state constitution and the rule of law. We wear masks in public out of concern for others in order to slow the spread of coronavirus. But casino lobbyists mask the nature of instant racing out of concern for their bottom line without regard to the public interest. I hope the Kentucky Supreme Court will see this.