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Kentucky Judge Rules Historical Racing Is Legal Pari-Mutuel Wagering

An eight-year court battle over the legality of historical racing machines in Kentucky may at long last be over. On Wednesday, Franklin Circuit Court Judge Thomas D. Wingate ruled that wagering on historical racing machines developed by Exacta Systems (formerly Encore Gaming) was, in fact, pari-mutuel wagering as defined by Kentucky law.
 
The Exacta Systems historical racing machines, which resemble slot machines but base their results on previously run horse races, were in place at Kentucky Downs in Franklin and Ellis Park in Henderson during the course of the legal challenge. They have since been added to the Red Mile/Keeneland joint venture gaming facility in Lexington.
 
The case dates back to July 21, 2010, when the Kentucky Horse Racing Commission, the Kentucky Department of Revenue and various racetracks in the state sought confirmation from Franklin Circuit Court that historical racing regulations adopted by the horse racing commission were valid and that the devices themselves did not violate state gambling laws.
 
On Dec. 29, 2010, the court entered an opinion and order in favor of the state agencies and racetracks, but the Family Foundation appealed the decision to the Kentucky Court of Appeals. The appellate court vacated the decision, remanding the case back to the Circuit Court for further review through the process of discovery. A discretionary review by the state Supreme Court also found that discovery was necessary to determine the legality of the historical racing machines. The Supreme Court affirmed the validity of the regulatory changes and racing commission's statutory authority, but found that the Department of Revenue exceeded its authority when it amended its regulations to allow historical racing revenue to be subject to the pari-mutuel tax.
 

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