Kentucky Gov. Andy Beshear crossed off a major item on his campaign checklist last week when he and other officials celebrated the opening of brick-and-mortar sportsbooks across the state. Sports betting in Kentucky, however, was just half of Beshear’s expanded gaming platform. The other half was a plan to legalize casino wagering, which he said would keep hundreds of millions of dollars in revenue that had been going to casinos in neighboring states, like Indiana and Ohio.
Last Thursday, after placing the first bet at Churchill Downs, Beshear told BetKentucky.com he still supports bringing casinos to the state. “It is wanted, desired, and demanded by the citizens of the Commonwealth of Kentucky, and I hope we can get there in the next couple of years,” he said. That sentiment is not shared by everyone in Frankfort, though.
HHR Making Millions For Kentucky Tracks
One can argue that Kentucky already has casino gaming. State law allows each of the nine licensed racetracks to host historical horse racing machines at their venues or at satellite facilities. HHR machines have the look and feel of a Las Vegas-style slot machine. However, rather than a random number generator determining if a player’s wager is a winner, HHR uses the outcomes of previously run races. In that aspect, the player’s wager is seen as a bet on horse racing and is considered parimutuel.
HHR has been in Kentucky for about 12 years. The state’s tracks pushed for the machines after efforts to pass a measure that would have allowed voters to decide on casino gaming failed to get enough support in the General Assembly. There are nearly 7,000 HHR machines in the state spread out across 10 tracks or satellite venues. More than $8.2 billion was wagered in the 2022-23 fiscal year, according to data from the Kentucky Horse Racing Commission, and the tracks reported gross revenues of $723.2 million. Tracks have used the proceeds from HHR to increase purses for live racing and invest in facility upgrades.
More machines are coming soon as a new track in Ashland and additional satellites in Louisville and Owensboro will open in the coming months. While historical horse racing is considered a parimutuel game, if someone walks through any HHR facility in Kentucky, you couldn’t fault them for thinking they were at a casino. It’s a fact even Beshear concedes, saying Kentucky is already “about 90%” toward having full-fledged casinos thanks to HHR.
The main difference between an HHR facility and a Class III casino is that the latter has live-dealer table games. HHR game developers are working toward a solution on electronic table games. Last month, Exacta Systems announced a partnership with Interblock to roll out the first electronic roulette game that uses Exacta’s HHR technology.
However, KHRC Chairman Jonathan Rabinowitz stated firmly that he did not support allowing such table games in Kentucky. In addition, Senate Majority Floor Leader Damon Thayer, R-Georgetown, has said that table games were not covered under the HHR legislation the General Assembly passed two years ago.
‘Gaming Fatigue’ In Frankfort
While there is some bipartisan support in the legislature for bringing full-fledged casinos to Kentucky – or at least letting voters decide the issue – Thayer cautions those bills would likely not be well received by majorities in both chambers. The same would hold true for a bill allowing HHR electronic table games. That’s because, as he told BetKentucky.com Thursday, state lawmakers have spent a significant amount of time over the past two years dealing with several gaming issues.
Besides passing retail sports betting and Kentucky betting apps, lawmakers also agreed to ban gray games during this year’s session, and that bill faced more resistance than sports betting. Last year, lawmakers passed a bill that reformed the tax structure for live racing and HHR. That bill also made Kentucky the first state to institute penny breakage for live racing payouts.
In 2021, the General Assembly passed a bill formally recognizing HHR as parimutuel gaming. That measure was necessary due to a 2020 state Supreme Court opinion that the machines did not abide by Kentucky gaming laws. “There is no appetite in the General Assembly for any further gaming expansion,” Thayer said. “It’s been a very challenging couple of years… There’s a little bit of gaming fatigue, and I would just discourage any of the gaming companies from talking about doing any further expansion in Kentucky. There’s a pretty good business model that’s working pretty well for them right now.”
State Rep. Al Gentry, D-Louisville, has long been a proponent for legalizing casino gaming, but in an interview with BetKentucky.com Thursday, he agreed there’s little appetite for more gaming legislation. Not that that’s likely to deter him. “I’ll still keep pushing,” he said. “We’ll obviously have to do something along the lines of a racino model, which is fine, but I’m all for it.”
Expanded Gaming Plan Likely Helped Beshear Win
This week marks the fourth anniversary of Beshear rolling out his expanded gaming plan, a proposal that coincided with the launch of sports betting in Indiana. At that time, Beshear served as the state’s attorney general and ran against incumbent Gov. Matt Bevin, and he made legalized gaming a major part of his election platform. Bevin categorically opposed any form of expanded gaming.
Casino gaming had been in the region for more than 20 years by that time, with riverboats set up in Indiana and Illinois close to several major Kentucky population centers. Ohio approved a land-based casino license for Cincinnati, and that facility was located downtown, a short drive away from the city’s Northern Kentucky suburbs.
Sports betting, though, was just starting to take hold across the U.S. a year after the PASPA ruling. It had just become legal in neighboring Indiana and West Virginia, and even lawmakers in Tennessee – a state often seen as socially conservative as Kentucky – passed a law earlier that same year allowing online sports betting. In the end, expanded gaming was a winner for Beshear as he defeated Bevin by 5,333 votes out of 1.4 million ballots cast.
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