Lexington, KY — Members of the Kentucky legislature on the evening of Monday (Feb. 1) said legislation defining historical horse racing would be introduced in the state Senate Tuesday (Feb. 2) and they urged racing stakeholders to continue advocating for its passage.

Historical horse racing, which originated as “Instant Racing” at Oaklawn Park in Arkansas in 2000, was launched at Kentucky Downs in 2011 and has generated hundreds of millions of dollars for purses and breed development, the operators of the facilities, and the state as it expanded to multiple racetracks. The devices, which resemble video lottery terminals, operate based on replays of previously-run races and were permitted after the Kentucky Horse Racing Commission in 2010 modified its definition of pari-mutuel wagering.

It has been the subject of ongoing court battles, and in September 2020 the Kentucky Supreme Court reversed a Franklin Circuit Court decision that said one type of historical racing machine in use in the state meets the guidelines. The high court in short ruled that the state legislature, not the court system, should determine changes in the definition of pari-mutuel wagering.

At the Feb. 1 informational meeting organized by the Kentucky Equine Education Project, lawmakers offered their support for passage of legislation but indicated it’s not a slam-dunk. This year’s General Assembly session is limited to 30 days — the last day for bill requests is Feb. 2; Feb. 10 and Feb. 11 are the final days for bills in the Senate and House, respectively; and the final day of the session is March 30.

Republican Sen. John Schickel said he will be the primary sponsor of the HHR legislation in the Senate. He chairs the Senate Licensing and Occupations Committee, which is expected to vote on the legislation Feb. 4.

“I feel passionately about this bill,” Schickel said. “Please get out and talk to your constituents. I think it will move out of committee fairly swiftly and go to the floor, but once it gets to the floor we need to be sure (the measure has the votes) in the Senate. This is a highly philosophical issue for some people and we need to respect that.”

Republican Senate Majority Leader Damon Thayer, who in 2009 requested a state Attorney General’s opinion that led to the KHRC modifying its pari-mutuel wagering definition to include HHR, said it would be “cataclysmic, catastrophic” if HHR were to end in Kentucky given the revenue it provides and the primary industry it supports.

“Historical horse racing has been around for about 10 years now and all I can see are positives,” Thayer said. “When the bill comes out the enemies will come with everything they’ve got. I will not back down from the biggest fight we have today, but this is a heavy lift. You’re going to see all kinds of specious arguments.”

One of them, Thayer said, is the tax rate on HHR, which opponents claim is too low. Thayer said the 1.5 percent HHR tax on gross income — before money is returned to patrons, operators and the state — actually translates into about a 33 percent tax. It follows the standard pari-mutuel tax on live racing and simulcasts. Though there is a set amount devoted to breed incentives from HHR, the actual amount that goes to regular purses comes from the operators’ share via negotiation with horsemen’s groups.

“It’s a competitive tax rate that allows HHR to operate in a very competitive environment,” Thayer said.

Lawmakers at the event indicated that pending legislation on sports betting in the state will not be mixed in with the HHR legislation. A sports betting bill was introduced during the 2020 General Assembly session but did not clear a committee; it was re-introduced this year.

“We have to keep the bills separate,” Thayer said. “With HHR, we have to keep what we have. That’s more important right now.”

Kentucky has two Standardbred tracks with HHR: The Red Mile, in a partnership with Keeneland, and the Churchill Downs Inc.-owned Oak Grove Racing & Gaming. (The Red Mile, in light of the Supreme Court ruling, recently suspended operation of its HHR facility.) Kentucky Downs and Keeneland last year announced plans to build a harness track and companion HHR facility in southeastern Kentucky near the Tennessee border; that project is on hold pending legislative developments.

Much of the discussion at the meeting centered on the value of the Thoroughbred industry to the Kentucky economy, but Thayer noted the Standardbred industry in recent years has made progress as well.

HHR revenue is the reason Oak Grove was built, and it allowed The Red Mile to rebuild most of its facility. In addition, changes in the Kentucky Sire Stakes program that focus on mare residency has greatly expanded the number of horses that participate and has boosted the agricultural economy in the state.

“The Standardbred industry is also important to Kentucky,” Thayer said. “The industry is making a comeback and we need to make sure it continues its positive trajectory.”