CDI-Keeneland Partnership Awarded Oak Grove License

The Kentucky Horse Racing Commission voted in a majority decision Nov. 16 to award a license for a new Standardbred track—and with it, a lucrative opportunity to offer historical racing in the Nashville, Tenn., market—to the WKY Development applicant consisting of Churchill Downs Inc. and minority partner Keeneland.

The decision was reached during a special meeting held at Central Kentucky Riding for Hope at the Kentucky Horse Park Friday, in which the KHRC heard final presentations from the trio of applicants seeking the racing license in the Oak Grove, Ky., area. In addition to the CDI-Keeneland pairing, Kentucky Downs and Caesars—the latter of which owns the Bluegrass Downs Standardbred track near Paducah, Ky.—also put forth proposals in an attempt to gain the first new racing license in the state in nearly 25 years.

During a four-plus-hour meeting Oct. 30, CDI and Keeneland presented a plan that would see $150 million put toward a five-eighths of a mile harness track that features entertainment, an equestrian center, and a hotel.

Churchill Downs racetrack president Kevin Flanery reiterated Friday the historic commitment of the two Thoroughbred tracks to Kentucky racing. He also laid out plans to have 12 racing dates at the new venue in 2019 and hopes to increase that to 16 days in 2021.

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The WKY Development plan would have a historical racing fund for the Standardbred purses at the new track, according to Flanery, with additional money used to support Thoroughbred racing and The Red Mile harness track. Besides the purses supplied at the new track for 12 days of racing, he envisioned the historic racing facility, which would start at 1,200 machines with the possibility to expand to 1,500. He estimated the facility would generate $10 million for both Thoroughbred and Standardbred purses in the state.

"We're excited that the Kentucky Horse Racing Commission has put their faith in the partnership with Churchill and Keeneland to move forward to build this facility in Oak Grove," Flanery said after the vote was taken. "We think together we've got tremendous history in the state of Kentucky of supporting horse racing and a proven track record of overdelivering, being innovative, and really (having) a positive economic impact on the areas that we call home. We are looking forward to that opportunity in Oak Grove."

Flanery said the partnership is already "well on their way" in the design process of the new facility and expects the construction schedule will allow them to have their first race meet there by fall 2019.

One of the initial concerns raised regarding the WKY Development proposal was that it was the only one that didn't include a permanent stable area and the only one without an agreement with the Kentucky Harness Horsemen's Association. Flanery said Friday that once they got the license and knew what their dates were, they would build stalls for the "appropriate number of horses and race dates" they were granted.

The decision to award the Oak Grove license to the CDI-Keeneland partnership was met with frustration by representatives of Caesars and Kentucky Downs, regarding both the outcome and the process that led to it.

Caesars executive Dan Real asked to comment further on the record before the commissioners after the vote was taken but was denied. He later expressed his dismay at several aspects of the decision.

"It's absolutely ludicrous," Real said. "They don't have a signed horsemen's agreement, they don't have the ability to do simulcasting, they don't have any history, relationship, marketing or efforts in the region … and, obviously, the other two operators do. I've never been to a place where they had (a) motion for approval before a vote by a commission already in the hands of the commission's attorney—already written out before that happens. … It leads me to believe this was always set up to be what it was since day one."

KHRC general counsel John Forgy responded to Real's claims about having a motion ready to go on behalf of CDI-Keeneland by stating he had prepared advanced written motions to cover all outcomes, including the possibility of deferring the vote.

"There are several things that could have happened here. One was that the commission could have voted to deny all three applicants," Forgy said. "A motion was prepared for that eventuality. The other thing that could happen is one applicant could be granted it, and in that case, legally, you have to deny the other two. So rather than make this up off the top of my head sitting here, what I did was sit down and write out a motion expressing both of those with a blank in it, because I don't know ahead of time which applicant would be awarded and which two would be denied. But it would be identical language for whichever applicant was awarded the license."

A major development since that initial meeting last month was the announcement Nov. 13 that Kentucky Downs had reached an agreement to be sold to owner/breeder Ron Winchell and Marc Falcone. In their time before the commissioners Friday, Winchell and Falcone argued the need for more time "to come back and give you guys a comprehensive, well-thought-out proposal" and asked the KHRC to defer the vote.

"It's been 25 years since the last license was issued. Take more than 25 days," Winchell said.

After that plea ultimately was not heeded, Winchell and Falcone also expressed disappointment in the overall proceedings.

"We obviously came to the process late. We emphatically, really wanted more time because this is such an important decision," Winchell said. "The process, I think, in comparison to other processes, is something that left other desires, let's call it. The process, I think, was not the best."

"We are disappointed the commission didn't even take up an interest in giving us more time, frankly," Falcone added.