Kentucky Governor Signs HHR Bill, Keeps the Machines On

Kentucky Gov. Andy Beshear signed Senate Bill 120 Tuesday, legalizing historical horse racing machines and protecting the economic impact they have on the state’s signature equine industry.

For now, that ends the legal saga on whether the slot-like machines meet the definition of pari-mutuel wagering. Introduced in January by State Senator John Schickel (R-Union), SB 120 does exactly that. The HHR bill expands the state’s definition of pari-mutuel wagering to include HHR machines.

“Today, I signed SB 120 into law, protecting our signature Thoroughbred industry in the commonwealth,” Beshear said via Twitter. “We still need to enact a more fair and equitable tax structure and believe our partners are committed to doing so.”

The Kentucky Equine Education Project (KEEP), the equine industry’s prime economic lobbying arm, quickly applauded the move. KEEP maintained a steady drumbeat of information regarding the economic impact of HHR on Kentucky’s Thoroughbred industry.

Beshear waited for HHR bill to reach him

“We thank Governor Beshear for signing Senate Bill 120 into law, which [will] ensure the future of our equine industry while protecting thousands of local jobs,” the statement read. “Kentuckians and the legislators who represent them have made it clear they support historical horse racing and the many benefits it brings to our communities. We are optimistic about the horse industry’s road ahead, and remain committed to keeping Kentucky a world-class racing destination for many years to come.”

Beshear said last week that he promised to sign the bill “as fast as it reaches my desk.” With his signature, HHR machines will continue whirring and providing positive economic impact to the state. Last year, HHR machines – which invite wagers based on previously run races – raked in more than $2.2 billion in handle.

Some of that went toward boosting Kentucky purses to the highest average in the country – more than $64,000 per race. A mere 1.5% of that went to the state’s tax coffers, which opens the next front on the HHR campaign.

Next battle: The tax front

Beshear and several Democratic legislators in the Republican-dominated State Senate and Assembly want a higher tax rate on the machines.

This all-encompassing debate happened because the Kentucky Supreme Court ruled 7-0 last fall that one type of HHR machine did not meet the definition of pari-mutuel wagering.

The Court’s ruling gave a victory to the Family Foundation, a conservative, anti-gaming organization. That group pursued nearly a decade-long crusade against the machines.

Anti-gaming organization cries constitutional foul

The Family Foundation issued a statement from Martin Cothran, the organization’s senior policy analyst, before Beshear signed SB 120. Cothran’s organization maintained all along that any bill coming out of the state legislature would be unconstitutional. The Family Foundation claims that the only legal way to define pari-mutuel wagering is by changing the state’s constitution.

“The legislation was in response to a unanimous 7-0 ruling by the Kentucky Supreme Court that the machines were not pari-mutuel in the way they operated and therefore, (are) illegal,” the statement read. “In response, the legislature, ignoring the Court’s criteria for what constitutes pari-mutuel wagering, simply wrote a new definition for pari-mutuel wagering, one not shared by anyone outside Kentucky.”