Ky. justices say historical horse racing isn’t pari-mutuel wagering


FRANKFORT, Ky. (KT) - The Kentucky Supreme Court issued an opinion Thursday where they unanimously agreed that historical horse racing is not pari-mutuel wagering and is therefore illegal under state law, concluding a decade long battle.

This is the second time the case has come before the justices, and this ruling followed oral arguments that were held in August.

"The Family Foundation is grateful to the justices for seeing through the smokescreen generated by the tracks and the Kentucky Horse Racing Commission that for years has masked a form of gambling that ignored the clear legal definition of pari-mutuel wagering," said Martin Cothran, spokesman for The Family Foundation. "This decision reaffirms that words have meaning and that even the state's most powerful industry can't turn the plain language of the law upside-down for its own economic benefit. We are grateful to the justices on the Court for their common-sense ruling that the rule of law still prevails."

In 2014, the high court ruled that the Kentucky Horse Racing Commission had the legal authority to license pari-mutuel wagering on historical horse racing, but sent the case back to the trial court to determine whether instant racing constitutes the unauthorized expansion of gambling in violation of Kentucky law.  

The Franklin Circuit Court decided that the instant racing machines, even though they looked and operated in many ways like slot machines, nevertheless met the definition of pari-mutuel wagering and were thus authorized under Kentucky law. 

However, in an opinion written by Justice Laurance VanMeter and agreed to by five of the six other justices said, “Because we hold that the Encore system does not create a wagering pool among patrons such that they are wagering among themselves as required for pari-mutuel wagering, the trial court misapplied the applicable regulation as a matter of law.”  

They also said that if a change in the long-accepted definition of pari-mutuel wagering is to be made “that change must be made by the people of this commonwealth through their duly-elected legislators, not by an appointed administrative body and not by the judiciary.”

They reversed the lower court ruling and remanded the case back to the Franklin Circuit Court “for entry of a judgment consistent with this opinion.”

Stan Cave, an attorney representing the Family Foundation of Kentucky, hailed the decision and said it was a long time coming.

"I'm appreciative of the Supreme Court's 7-0 decision," he said. "It's time for the tracks to stop until the law is determined by the General Assembly and not a state agency."

Cothran added: "Ten years is a long time to see a legal issue resolved by the courts, but watching Stan Cave square off against the state's most powerful industry with a legion of high-priced attorneys was inspiring. He didn't just slay one Goliath, but a whole host of them."

In light of the decision, Cothran said,  the Family Foundation is asking that horse racing tracks running historical racing parlors cease operations until it can be shown their activities are legal.

"The time for flouting the law is over," he said.

In a separate opinion, Justice Michelle Keller noted their holdings in the 2014 case “were limited to affirming the commission’s statutory authority to promulgate regulations regarding historical horse racing if such racing was pari-mutuel, but we lacked a sufficiently developed record to determine whether any specific system was pari-mutuel. As to the second question, the trial court undertook a yeoman’s task with the limited guidance we provided.  Ultimately, however, I agree with the majority that the operation of the Exacta System is not pari-mutuel as defined in the common law.”

Gov. Andy Beshear offered a statement on the opinion with a hint of a plan in the works.

“Historical Horse Racing is an important part of Kentucky’s economy that supports jobs and contributes over $21 million to the state budget,” Beshear said in the statement. “We are working with various partners to find a path forward.”


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