What Kind Of Slot Machines Are At Kentucky Downs

Kentucky’s pseudo-slot machines are under threat after a court ruled that they don’t fit within the state’s pari-mutuel wagering definition. Kentucky Downs and Churchill Downs Inc’s. Another type of instant racing machine, and the one chosen for Kentucky Downs, has a small race replay in the top right hand corner which determines the placement of the reels on a traditional slot machine. While pari-mutuel in nature, these instant racing machines are basically slot machines that conform to state gambling laws.

The thoroughbreds that race at Kentucky Downs move quickly as they gallop around the uniquely shaped European-style turf track. Talking with Director of Marketing John Wholihan, it sounds as though those working at Kentucky Downs have been doing a lot of racing around at top speed as well.

The track is readying to host its annual race meet, with the first day of races happening Labor Day, Sept. 7.

Coinciding with that event will be the unveiling of a renovated, 30,000-square-foot expansion to the property’s gaming space, the newly-named Mint Gaming Hall at Kentucky Downs.

There’s still work to be done, says Wholihan. But it appears the team has jockeyed themselves into good position for an exciting September, with further plans for Kentucky Downs in the future.

Visitors invited to make some coin at the new Mint Gaming Hall

Kentucky Downs is located in Franklin, KY, a bit north of Nashville and just over the Tennessee border. For most of the year, the action primarily happens indoors where patrons playhistorical horse racing machines and enjoy simulcast wagering.

What Kind Of Slot Machines Are At Kentucky Downs Race Track

Then every September comes the annual race meet. This year’s schedule includes six days’ worth of races (as opposed to the usual five) lasting Sept. 7-16.

Following a three-month spring shutdown due to COVID-19, the facility reopened in June with new safety protocols in place. But expansion plans were already underway, introduced by new owners early last year.

Groundbreaking on the expanded Kentucky Downs gaming hall came in November 2019. After many months of work, the fruits of all that labor will soon be revealed.

“It’s been an interesting summer,” says Wholihan with a chuckle. His understatement becomes more obvious as he catalogs what has been added.

There’s a new 24-seat bar with large screen TVs for watching sports. There is a proper stage where bands and others can perform.

It also features a new high-limit room where the Players Club will be relocated. The number of historical horse racing machines will be increased as well, likely settling between 1,100 and 1,200 when all is said and done.

The new name, Wholihan explains, is meant to evoke both gaming and horse racing at once. “The mint is where they make coin, and it’s an old Vegas name,” he points out. But it is still Kentucky Downs, a name that “stays true to the horse racing roots.”

More machines, variety among historical horse racing games

The additional HHR machines have led some to ask if the new gaming hall will feature other casino games, too. Kentucky gambling law won’t allow that, but visitors will be encountering some new games.

“While we don’t have the Vegas or Tunica-type games or slot machines, we are going to be bringing in some new manufacturers,” says Wholihan.

Up to now, Exacta Systems has been the sole provider of the HHR games for Kentucky Downs. “But there are now a couple of the bigger, traditional slot machine makers from Vegas that are jumping into historical horse racing. That’s exciting.”

For those unfamiliar, historical horse racing games draw on a large database of thousands of previously run races to offer bettors a chance to wager on outcomes. Players can either use the auto-handicap feature or test their own handicapping skills to make selections themselves.

Thus, the games do incorporate a skill element that makes them legal.

As Wholihan points out, players adopt different approaches to the games, much as they choose to play for lower or higher stakes. He also notes how the pari-mutuel nature of the games helps build some big jackpots while also lessening the house’s concern about the payouts.

“Since we’ve reopened, we’ve had a $741,000 jackpot, we had another the other day for $200,000, and we’ve had a $115,000 one. We’ve had some juicy five- and six-figure jackpots, too,” he says.

Since these are pari-mutuel games, the house already has its commission. That helps those running the games join in the customer’s excitement when such big wins come along.

“It’s like the race track. We all bet and the track doesn’t care if the big longshot comes in,” says Wholihan.

More renovations to come, and ongoing safety protocols

Wholihan says they’re aiming to have 1,100 machines operating by the start of September. That’s a total that would more than double what they’ve had in the past. That said, between further renovations and social distancing restrictions, the total could fluctuate as they go.

Speaking of ongoing renovations, work will be continuing after the start of September at Kentucky Downs. Throughout the rest of 2020, the existing 80,000-square-foot building will also be redone. Along with introducing various improvements and matching the new color scheme, additional food options will be coming as well.

Looking a bit further down the road, there are plans to build a hotel on the premises. That would be later 2021 or 2022, says Wholihan, as there’s a lot else to take care of first.

Meanwhile, COVID-related protocols will continue to affect the arrangement of the gaming space.

“We actually reconfigured our floor,” says Wholihan, noting how they couldn’t simply shut down every other machine to ensure proper social distancing. “No matter where you sit, you turn to your left or right and you’re six feet apart… we’re very stringent on following the rules,” he says.

They have also explored using plexiglass and putting in dividers with spacers to ensure distancing. Other measures include:

• Temperature checks
• Gloves
• Masks
• Hand sanitizer stations
• Enhanced air filtration
• Additional cleaning

“We have lots of cash machines, too, so people don’t have to wait in lines to cash out,” says Wholihan. “We’ve adapted, and technology has helped.”

Huge purses once again at Kentucky Downs race meet

What Kind Of Slot Machines Are At Kentucky Downs Selections

While tickets are being sold for the upcoming races, there will be limits there as well with restrictions on crowds and seating.

The Sept. 7 start was picked to avoid conflict with the rescheduled Kentucky Derby, which will take place at Churchill Downs in Louisville on Saturday, Sept. 5.

The race meet at Kentucky Downs is a huge event. There is $2 million a day in purse money, including some $400,000 races and a marquee $1 million race.

TVG will broadcast races live as well. That will help draw more eyes to the picturesque location and its wide, kidney-shaped turf track.

“We’ve had a nice mix of rain and sunshine,” says Wholihan, referring to yet another area of maintenance currently being attended to at Kentucky Downs. “We’ve got good grass that gives a good cushion, and that makes it safe for the horses. All I can say is, you don’t want to lose your golf ball in there!”

As if there were any time to pitch and putt!

Click here for more information about the 2020 Race Meet at Kentucky Downs. And click here for more about the new Mint Gaming Hall and everything else happening at Kentucky Downs.

What Kind Of Slot Machines Are At Kentucky Downs Handicappers

Betting using instant wagering machines, which resemble and operate similar to slot machines, has exploded across Kentucky and thousands more machines will come online in the near future. Yet the state taxes them at very low rates compared to slot machines in other states and even compared to live racing within Kentucky at comparable levels of betting. Especially in the face of more state budget cuts next session unless new revenue is generated, taxing these machines appropriately is an action the 2020 General Assembly should take.

Lost revenue is substantial

In May, we wrote about the missed opportunities and lost revenues because of Kentucky’s failure to uniformly tax betting that is already happening in our state. At that time, we estimated the potential new revenues from taxing all betting at a uniform 3.5% of average daily handle (the average amount bet daily), and depositing all the resulting new revenues in the General Fund, at over $40 million.

Since then, instant racing machine use has continued to grow rapidly. Based on new information, we now estimate the potential new revenues at over $60 million annually, excluding the expansion of instant racing machines described below. If the tax rate is increased and the planned expansions occur, potential new revenues over the next two years could increase to as much as $80 –$100 million, providing significant support to much-needed investments in the commonwealth.

Casinos are here—in the form of “instant racing” slot machine parlors

Between 2018 and 2019, the amount bet through instant racing machines increased by 80%, or just over $900 million, primarily due to the addition of 900 new machines at Derby City Gaming in Louisville in September of 2018. Existing instant racing venues also experienced double–digit growth in the amount bet and gross commission per day, per machine.

Moving forward, there will be a more than tripling of the number of instant racing machines operating in the state. On top of the 2,800 machines now in use, the Kentucky Horse Racing Commission has approved the addition of over 7,000 new machines that will likely become operational over the next 24 months, including the following:

What Kind Of Slot Machines Are At Kentucky Downs Racetrack

• Oak Grove, a new facility currently under construction in Christian County, which is jointly operated by Churchill Downs and Keeneland. It includes an instant gaming parlor, hotel, equine center and Standardbred track. Oak Grove began offering live betting on Standardbred races in October of 2019, and plans to open its instant gaming facility in June of 2020 with 1,200 instant racing machines.
• Kentucky Downs, located in Simpson County, which was recently purchased by new owners from Nevada. The facility is expanding with an anticipated completion date of September 2020 for the first phase, which will increase the number of instant racing machines at the location from 753 to 1,200.
• Ellis Park, located in Henderson County, which was recently purchased for the second time in less than a year by Ellis Entertainment, a subsidiary of Laguna Development Corporation, based in New Mexico. In June 2019, the track was approved to increase the number of instant racing machines from 179 to 1,200 as part of a renovation and expansion.
• Churchill Downs announced in October of 2019 a significant renovation project that includes a hotel and an instant racing parlor with 900 machines at its flagship track facility. The projected completion date is late 2021. (It should be noted that Churchill has received approval for a total of 3,000 machines that can be deployed at Derby City or at the new on-track facility. Derby City currently has 1,000 machines, so a total of 2,000 additional machines can be deployed by Churchill at any time).
• Churchill Downs purchased Turfway Park, located in Boone County in October 2019. Turfway is the only thoroughbred track in Kentucky that currently does not have instant racing machines. As part of the approval process, the Kentucky Horse Racing Commission approved up to 2,500 instant racing machines, which will be part of a major renovation that is expected to be completed in late 2021.

Kentucky’s tax rates on slots are extremely low

Kentucky’s tax rate on instant racing is very low compared to the rate imposed on live racing in the state at tracks with comparable average daily handles. Instant racing is currently taxed at just 1.5% of the average daily handle, compared to a rate of 3.5% imposed against betting at tracks with an average daily handle of over $1.2 million (2 of the 4 instant racing facilities currently operating have an average daily handle of over $1.2 million, with Keeneland/Red Mile likely to hit that level in 2020).

Kentucky’s tax on instant racing slot machines is also low compared to how other states tax slots. Most states impose gambling taxes based on “gross revenues,” which are generally defined as the amount that remains after paying winning bets. Our surrounding states impose taxes on gross revenues from slot machines at rates ranging from 26% in Missouri to 53.5% in West Virginia. In comparison, Kentucky’s effective tax rate on instant racing, calculated on the same base used by other states, is just 18%. But that number overstates what Kentucky collects because most of the tax receipts are required by statute to be distributed back to the industry. For example, in 2019, 60% of the taxes collected were distributed to purse support funds, backside improvement funds for race tracks and other industry-related endeavors. The effective tax rate based on revenues deposited in the General Fund is even lower at just 8%.

Given the significant growth that has already occurred, the planned expansions that are currently underway, and current tax rates that are well below industry averages, and which primarily benefit the horse industry, there is significant room to generate additional revenues while still providing strong support for the industry. Taxing these rapidly proliferating casino-style slot machines and investing the revenues in the commonwealth is an opportunity the 2020 Kentucky General Assembly should not miss.

Note: The legality of instant racing machines remains at issue. A lawsuit challenging whether bets made through instant racing machines constitute pari-mutuel wagering, the only form of betting that is legal in Kentucky, other than the lottery, is currently before the Kentucky Supreme Court on appeal from a 2018 ruling of the Franklin Circuit Court which found instant racing bets to be pari-mutuel. The court is expected to hear oral arguments and to rule on the case in early 2020.