Court Rules Against Horse Racing Commission, Race Tracks

After 6 years of litigation, serious doubt cast on legality of slot-like gambling devices.

The Franklin Circuit Court handed a significant victory to opponents of the Encore Gaming System, a slot-machine style system similar to Instant Racing. Late last week, the trial court denied a motion for partial summary judgment in a case in which The Family Foundation has argued that the slot-machine style system is unconstitutional and violates Kentucky law.

“The ruling shows that the Judge in this case understands the issues at stake and is willing to go where the argument leads,” said Martin Cothran, a spokesman for The Family Foundation, the group opposing the Encore gaming system. “Not only that,” he said, “but the wording of the Court’s decision could make it difficult, if not impossible, for the race tracks and the Horse Racing Commission to ultimately prevail in this case,” said Cothran.

The group said that the ruling traps the advocates of expanded gambling pushing the new form of electronic gambling into a dilemma they may not be able to escape. The Court agreed with The Family Foundation’s arguments, he said.

“We argued that the gambling pools created under this new system of gambling may never be fully paid out to winning players as required by state law, a requirement acknowledged by the Racing Commission’s own expert witness. We also argued that players might win more money than a wagering pool could pay. In this event the host tracks would add more money to the pool. When the host track adds money to a wagering pool, the host track becomes a participant in the wagering, just like in Las Vegas style slot-machines. The Judge agreed in his decision. So the slot-type games either fail to pay out pools to players or the host tracks are participating in the wagering to keep the gaming system solvent. Either way, the games appear to violate Kentucky law,” said Cothran.

“This might explain the Racing Commission’s attempts to change the underlying law by legislation in the current 2017 Session of the General Assembly. Legislative efforts to change the law concerning what is and is not pari-mutuel wagering on horse racing faced weak support in the House and strong opposition from constituent groups.” The proposed legislation died in the House from lack of support.