Instant Racing Article 1-2011a

January 2011

“Instant Racing” ruled legal, TFF appeals

201101a E“Instant Racing” is neither pari-mutuel nor is it live racing, as the law requires. Appellants believe the Dec. 29 ruling will not stand.

On Jan. 20, 2011, Stan Cave, the attorney for The Family Foundation, filed papers to appeal Circuit Judge Thomas Wingate’s Dec. 29 ruling that affirmed the use of “Instant Racing” video terminals at the state’s race tracks. Cave’s filing begins the second round of legal action that many say may end up at the Kentucky Supreme Court.

“We expect the Court of Appeals to reverse the Franklin Circuit Court,” said Martin Cothran, senior policy analyst for The Family Foundation.

Is it “Live Racing”?

Current law permits pari-mutuel wagering on live horse races.  “How can you have ‘live racing’ with video tapes of past races, some of which occurred decades ago?” asked Cothran. “And, in particular, how can you have live racing with dead horses?”

In the briefs, the Department of Revenue argued: “From the perspective of the wagerer, a historic horse race is very much ‘live’ –– the wagerer does not know the outcome of the historical horse race in advance any more than a wagerer at a track knows the outcome of a race physically conducted at that track.”

In other words, it was “live in the mind of the wagerer.”  Cothran pondered if by that logic someone could get out of a speeding ticket because he “thought” he was only going 35 miles per hour.

Is it “Pari-Mutuel”?

The other major problem with the ruling is its finding that Instant Racing is “pari-mutuel.”  The essence of pari-mutuel wagering is that wagerers bet against each other on the same race or combination of races. With Instant Racing, that is impossible. Instant Racing patrons are playing on their own machine, at their own pace, at different times of the day, at different race tracks and on different historical races.

The Dec. 29 ruling claimed that the complex system of “pools” set forth in the Department’s regulations is somehow equal to “pari-mutuel.”  Cothran said, “It looks more like a Ponzi scheme as money is moved from one pool to another rather than simple pari-mutuel wagering.”

With the notice of appeal filed on Jan. 20, it is likely that the Appellate Court process could extend until the Fall of 2011, and from there to the Kentucky Supreme Court.

Separation of Powers at issue

The other major issue made manifest by this case is the question of separation of powers of the three branches of government. The legislature has a simple process to oversee the writing of regulations that emanate from legislation it has passed. In this case, the Executive Branch, at the direction of Gov. Beshear, has asked the Judicial Branch to intervene and affirm with “emergency authority” that Instant Racing is in fact legal. Yet, all the while, those pushing Instant Racing have deliberately postponed and delayed scrutiny from the legislative oversight committee.

It boils down to this question, “Why is the Executive Branch working with the Judicial Branch to disrupt what the Legislative Branch is constitutionally commissioned to do?”  The answer, according to Cothran, is simply, “To expand gambling.”

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