Historical Horse Racing ‘Not Going Away’ in Kentucky as Two Parlors Open This Week

Posted on: August 29, 2022, 06:55h. 

Last updated on: August 29, 2022, 01:54h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

Historical horse racing (HHR) has entrenched itself as a gaming option in Kentucky, and later this week, two more parlors will open, adding more than 1,200 machines in the state.

The Mint Kentucky Downs
The Mint at Kentucky Downs is one of seven historical horse racing venues in Kentucky. Two more parlors are set to open on Thursday. (Image: The Mint)

HHRs are slot-like gaming machines. Rather than using a random number generator like a Class III slot, HHR machines use previously conducted races to determine the outcome of each bet. Under Kentucky law, the machines are considered pari-mutuel gaming.

On Thursday, Churchill Downs Incorporated will celebrate the grand opening of Turfway Park’s new facility. The $145 million project includes a new grandstand at the Erlanger track, as well as 800 HHR machines and two restaurants. It will be the newest entry in what’s becoming a crowded gaming market in the Cincinnati area. Within a 35-mile radius of Turfway, there are four full-fledged casinos in Indiana and Ohio, and two video lottery terminal racinos in Ohio.

On the same day, 171 miles south on Interstate 75, The Mint Gaming Hall plans to open its newest gaming facility, a 450-machine parlor in Williamsburg that will include a restaurant and bar. The Williamsburg parlor, the first HHR venue in Eastern Kentucky, will be a satellite facility for a harness racing track currently under construction in Corbin. That track is a joint venture between The Mint owner Kentucky Downs and Keeneland.

Billions Bet on HHR in Kentucky

How big is HHR in Kentucky? It’s huge, according to figures from the Kentucky Horse Racing Commission (KHRC).

More than $6.8 billion was wagered on HHR machines in Kentucky during the 2021-22 fiscal year, which ended in June. There were 5,569 machines at seven tracks and satellite facilities across the state through June. Those venues generated nearly $592 million in revenue for the fiscal year.

Kentucky taxes HHR machines at 1.5% of the handle. That levy netted Kentucky more than $102 million. Of that, $53.8 million went into development funds designed to bolster harness and thoroughbred racing in the state through purse supplements. In addition, $47.1 million went into the state’s general fund.

Starting this fiscal year, more HHR money will go into the general fund. That’s thanks to a new law the Kentucky General Assembly passed earlier this year. One aspect of that law will reduce the funding going into the development funds once they hit certain thresholds.

State Rep. Adam Koenig, R-Erlanger, told Casino.org that the additional HHR tax funding going into the general fund will help the state reduce, and potentially eliminate, its income tax rate. Another bill passed by lawmakers earlier this year calls for Kentucky to reduce its personal income tax rate as the general fund reaches certain levels.

More Machines Coming

HHR was introduced in Kentucky back in 2010. After a 2020 state Supreme Court opinion questioned the legality of machines, lawmakers passed a law the following year allowing the KHRC to approve and regulate the machines.

Koenig and other racing supporters say revenue from HHR has not only revived racing in Kentucky, but made it a viable year-round market. The increased purses have helped attract more horsemen, which means more attractive fields for bettors.

                It’s a feature, and it’s not going away,” Koenig said.

The latest wave is the 1,250 HHR machines that will go live in the state this week. Hundreds more will be installed across the state within the next couple of years, as racing and gaming continue to expand.

Churchill Downs’ Derby City Gaming venue has expanded several times since it opened nearly four years ago. With more than 1,100 machines, it ranks as the second-largest HHR parlor in the state.

Derby City’s latest expansion is a $76 million project that will add 200 more machines and leave room for 200 more. The gaming expansion will open later this year. A 123-room hotel on the property is set to open early next year.

In addition, Churchill Downs is spending $80 million to build a 500-machine venue in downtown Louisville. Derby City Downtown will include a sports bar with an entertainment stage, and a top-flight bourbon library. Churchill Downs officials anticipate it opening next year.

Elsewhere in the state, Revolutionary Racing’s $55 million quarter horse track and equestrian center in Ashland will include a gaming facility holding 400 HHR machines.