Regulator Approves New Kentucky Downs Owners

At the same meeting in which the Kentucky Horse Racing Commission approved a new owner of the state's first track to offer historical racing games, it also heard a promise from an official of Kentucky's lone track without the games that they will be added by June.

In a Feb. 19 regular meeting at the Kentucky Horse Park, actions related to historical racing proved prominent as the KHRC approved extended hours for Kentucky Downs and Churchill Downs' Derby City Gaming and also heard that the latter is moving toward full regulatory compliance.

The new owners of Kentucky Downs, the state's first track to offer historical racing games in September 2011, were approved for licensing by the racing commission following a question and answer period with Ron Winchell and Marc Falcone, the new majority owners through their Kentucky Racing Acquisition. 

Angst: Kentucky Racing Acquistion to Purchase Kentucky Downs



During that question and answer period, an attorney for Kentucky Racing Acquisition said the entity would file paperwork Feb. 19 or 20 to drop out as a plaintiff in litigation brought by the track's former owner appealing the regulator's decision to award licenses to offer Standardbred racing and historical racing games at a location in the Oak Grove, Ky. area to a partnership of Churchill Downs and Keeneland. That appeal, filed Jan. 4 in the Franklin (Ky.) Circuit Court of Appeals, seeks to void the KHRC decision on the Oak Grove license.

Angst: Kentucky Downs Appeals Oak Grove License Decision

The license will allow the new owners of Kentucky Downs to offer live racing, simulcast racing, and historical racing. Winchell, a prominent Thoroughbred owner and breeder who also owns a chain of slot machine parlors in the Las Vegas area, said he's looking forward to upgrading the customer experience at Kentucky Downs.

"I have a significant interest in racing and breeding and I want to see a bright future for the industry," Winchell said. "Basically, that'll be the backdrop for every decision we make."

Meanwhile, Turfway Park general manager Chip Bach said the lone Kentucky track without historical racing plans to install 300 to 350 machines by June 1. The fact the track doesn't have an agreement in place with a historical racing games provider had several commission members skeptical of the long-delayed plans for the games at the track, but Bach noted that a non-smoking area for race betting has been moved from the first floor to the second floor in preparation to add the machines.

Angst: Turfway Moves to Plan B on Historical Racing

The current plan aims to largely add the games to the existing facility after a larger, $25 million overhaul of the grandstand was shelved. KHRC vice chairman Mark Simendinger noted Turfway was first approved for 250 historical racing games in December 2015, and with that in mind, the commission told Bach that rather than approving additional games, it will consider a new measure for the planned 300-350 games when, or if, the track finally makes its request.

In Louisville, while Churchill's Derby City Gaming has proven to be a hit, the commission has continued to fine it $1,000 a day because some of its machines are generating winning combinations from previously run races that included scratched horses. Because the winning results are based on post position, rather than program number, the KHRC has found no evidence that the games, or pools, have negatively impacted customers. 

With no negative impact found, the regulator has allowed the games in question to continue to be offered but the programming is gradually being changed to bring the all the pools in question into compliance. Kentucky regulations require races used in historical racing games be free of scratches.

Steve May, the KHRC's director of pari-mutuel wagering, said 41 additional pools have been brought into regulatory compliance since the racing commission's December meeting, leaving just 22 remaining pools. The KHRC approved the 41 reconfigured pools on Tuesday. Derby City Gaming has updated the 22 remaining pools in question and has sent them to testing labs to see if the issue has been resolved.

Because of the regulatory violation, the KHRC continues to fine Derby City Gaming $1,000 a day. That total had reached $144,000 as of Jan. 31. May noted that Derby City Gaming, Churchill, and Ainsworth Game Technology have fully cooperated with the regulator.

"They want this resolved as badly as we do," May said.

Derby City Gaming has enjoyed a strong start, with $238.9 million in handle since its September launch. The facility saw about $59.5 million in handle in January—more than $1.9 million in daily handle. That performance has helped improve handle on historical racing games 64.1% in the 2019 fiscal year to $960 million.

The commission formally approved extended historical racing hours at Derby City Gaming and Kentucky Downs—moves initially approved by KHRC executive director Marc Guilfoil in late December. Derby City Gaming went from a Sunday through Thursday closing time of 2 a.m. to 3 a.m. while Kentucky Downs stays open all weekend: from 9 a.m. Fridays through 3 a.m. Monday.