Historical Racing Argued Again in Court

Attorneys for two sides in the convoluted court battle over historical race wagering in Kentucky were in court again July 25, arguing whether the type machines in use at Kentucky Downs are in compliance with regulations that govern the form of gaming.

The Family Foundation of Kentucky has challenged the legality of historical racing machines, which offer electronic games based on previously run horse races and are modeled after Instant Racing, which was conceived at Oaklawn Park. The court case that began in 2010 went to the state Supreme Court, which ruled the Kentucky Horse Racing Commission, a party in the ongoing case, was justified when it promulgated rules governing historical race wagering but sent the case back to circuit court for further review.

The machines made by RaceTech and in use at other Kentucky tracks that offer historical racing display a small window on the screen showing a video replay of the last several seconds of the race upon which the game’s outcome is determined.

The machines questioned during the Monday hearing before Franklin Circuit Court Judge Thomas Wingate are manufactured by Encore and are only in use at Kentucky Downs. The Franklin, Ky., track previously contracted with RaceTech before it selected Encore Racing Based Games as its provider in 2015. (Encore recently announced a name change to Exacta Systems.)

During the hearing, Family Foundation attorney Stan Cave argued that the Encore gaming machines do not show a video replay of the race as provided by the KHRC regulations but instead have animated horses displayed on the screen to recreate the last few seconds and outcome of the race.

“We believe, absent their being a video replay (of the race), that it cannot fall under the exception to the prohibition of gambling under the Kentucky penal code,” said Cave, whose characterization of the Encore images as being a cartoon cast a humorous element to the hearing. “It is not horse racing, it is not a video of horse racing, it is not a video replay of horse racing. It's a cartoon."

In questioning whether the images fulfill the requirement of the state regulations, Cave cited a report by Gaming Laboratory International that analyzes the machines before they are used. The report failed to clarify the question.

“They wrote they were not prepared to say that a computer-generated graphic reproduction—based upon data—that was similar to the outcome of the horse race would satisfy the video replay requirement.” Cave said of the GLI report. “Their expert witness is not willing to say this is a video replay.”

Bill Hoskins, representing Kentucky Downs, said if the Family Foundation wanted to challenge whether the race representation on the Encore machines complied with regulations it should have brought the matter up when the KHRC approved the machines or should have appealed the KHRC’s action.

Hoskins said the state Supreme Court concluded the medium through which a horse race is viewed or recorded is not an issue on whether historical racing is legal.

“This isn’t about the video replay,” Hoskins said. “This is about the wager and whether it is on a horse racing, about the outcome and whether it is dependent upon a horse race, and the payment of the outcome and whether that payment is from the pari-mutuel pool.

“The single issue before this court is ‘are these wagers pari-mutuel. The Family Foundation cannot redefine the law of this case. The Supreme Court did not remand this case to determine whether the post-wager, post-outcome confirmatory reenactment was a video replay. That is not within your jurisdiction.”

Wingate suggested the KHRC could change the regulations to ensure the Encore games are in compliance "so they're all right with the cartoons."

Wingate said he would rule promptly on the question of the Encore games, and he gave The Family Foundation up to two months to take the deposition of Richard LaBrocca on the GLI report referenced by Cave. The judge also postponed a Sept. 6 trial date that had been set on the lawsuit challenging the legality of historical wagering.