KHRC, Kentucky Tracks Request Rehearing on HHR

In Oct. 14 filings, the Kentucky Horse Racing Commission and several Kentucky Thoroughbred tracks petitioned the Kentucky Supreme Court to rehear arguments on historical horse racing.

The petitions by the KHRC, Ellis Park, Keeneland, and Kentucky Downs asks that the Supreme Court reconsider its Sept. 24 opinion that determined at least one brand of HHR operating in the state is not pari-mutuel. That decision could jeopardize a major source of purse funding in Kentucky.

The petitions ask that the court reconsider several of the findings on which it based its opinion that the Encore Racing Based Games' System is not pari-mutuel.

In the filings, the regulator and tracks argue that in 2014 the Kentucky Supreme Court determined that pari-mutuel wagering does not need to be on a single event and that it allows for seeded pools. These were two areas of concern raised by the opinion released last month by the Supreme Court.

The regulator and tracks said the games in question, as well as other games operating in the state, were built to ensure they met the standards as set by the 2014 Supreme Court's definition of pari-mutuel wagering.

"Now, however, the court has dismissed 10 years of litigation as well as the careful consideration of the seven justices on this court in 2014 and offered an opinion based on a brand new definition of pari-mutuel wagering not found anywhere in any statute, regulation, or case law," the request for rehearing reads. "The opinion's new definition requires that wagering be offered on a single event or 'the same, discrete, finite events,' but the phrase 'discrete, finite events' is found only in the language of the opinion, not in any authority cited by the opinion."

The petition also notes that seed pools are allowed in pari-mutuel wagering because they are fully paid out and do not invest the racing association in the outcome of the event. Thus, patrons are wagering against one another and not against the racing association.

The rehearing request also said the court's opinion relied on a misunderstanding about "off odds" in the game. It said that while the actual odds of the race used to generate the game's winning combination are supplied to customers to allow them some level of handicapping, the games determine payouts based on a pari-mutuel model tied to the success, or lack of success, of other players wagering into the same pool.

"The odds are not fixed or predetermined as this court found in the 2020 opinion," the filing by the KHRC and tracks said.

The petition filed Wednesday also asks that the Supreme Court, even if it does not reconsider its recent opinion, remand the case to Franklin Circuit Court for additional findings of fact rather than for reversal with instructions to enter judgment (which is what the Supreme Court did last month).