Kentucky Governor Chomping at the Bit to Sign HHR Machine Bill

With legislation legalizing historical horse racing (HHR) machines meandering toward his desk, Kentucky Gov. Andy Beshear told a virtual meeting of the Kentucky Horse Racing Commission Tuesday he will sign the bill “as fast as it reaches my desk.”

Beshear told the commissioners he couldn’t sign Senate Bill 120 last week because the Kentucky State Senate recessed Thursday night before sending the bill along.

“That’s regrettable,” he told the virtual meeting. “I was certainly here in the building on Thursday night. I know it’s something that we would have all liked to avoid. But we did get the bill through and my commitment – and I’ll make it today publicly – I will sign that bill as fast as it reaches my desk.”

Introduced last month by State Sen. John Schickel (R), SB 120 updates Kentucky’s definition of pari-mutuel wagering. The new definition includes HHR machines, the slot-like games that invite wagers on randomly generated past horse races.

HHR Machines Fuel Kentucky Racing

Those machines raked in more than $2 billion in handle last year, and the reinvested proceeds brought Kentucky horseracing the largest average purses in the country.

The Kentucky Supreme Court unanimously ruled last year that one brand of HHR machine did not meet the legal definition of pari-mutuel wagering. That sent a chill through the state’s equine industry, along with a not-so-subtle message to the state’s legislators that it was their job – not the judiciary’s – to define what constitutes pari-mutuel wagering.

With Schickel — whose northern Kentucky district includes Turfway Park and its HHR parlor — running point, legislators did just that. The Kentucky State Senate passed SB 120 on Feb. 9. The Kentucky House of Representatives passed it two days later. The bill enjoyed bipartisan support in both houses, although several House members voted for the bill while vowing to increase the tax from its current 1.5% of handle.

Next HHR Debate Point — Fair Tax on Handle

Beshear held himself to that standard, telling the commission he is committed to “enacting a more fair and equitable tax structure.”

Tuesday’s KHRC meeting addressed conditions for HHR facilities that ensure compliance with SB 120. The KHRC has approval over the number of machines in a facility, the layout, security protocols, hours of operation, and even the game themes.

Along with that, facilities must present written reports from an independent testing laboratory verifying HHR machines comply with state law. Those reports must ensure facilities comply with SB 120’s definition of pari-mutuel wagering.

To comply with this, any facility offering HHR machines must seed an initial pool of wagering funds. That way, bettors playing HHR machines have a pool of money to compete for and win from. The KHRC must provide written authorization before commingling those seed pools with other pools.