In Kentucky, Fayette Circuit Court Judge Thomas Travis recently overruled a motion by the Lexington racetracks Keeneland and Red Mile to dismiss a lawsuit over losses on historical horseracing machines, which the Kentucky Supreme Court found to be illegal.
Travis ordered attorneys for the tracks and for the gamblers who filed the lawsuit to begin preparing for trial. A pretrial conference is scheduled July 7.
According to the suit, a dozen plaintiffs “sustained thousands of dollars of losses,” documented by the loyalty program the gambling parlor used. They based their lawsuit on existing Kentucky statute on illegal gambling, referring to state Supreme Court ruling last September that HHR machines were not parimutuel. In February the General Assembly passed a bill declaring the machines to be legal.
According to the lawsuit, the gamblers are seeking to recover losses “by persons gambling on historical horse racing machines within the last 5 years,” operated jointly by Keeneland and the Red Mile at the Red Mile. The lawsuit also seeks punitive damages under the Kentucky Consumer Protection Act.
In court filings, the tracks argue the machines were considered legal at the time because the Franklin Circuit Court had ruled they were parimutuel.
“Indeed, until the Kentucky Supreme Court’s decision in Family Trust Foundation, all court orders held that HHR wagering constituted parimutuel wagering,” the tracks stated in their motion to dismiss. They also argued that legislation passed by the General Assembly in February redefining parimutuel wagering explicitly legalized machines “previously or hereafter approved.”
However, Travis found those arguments insufficient for dismissal and instructed the parties to prepare for a potential trial that could have significant impact on the horseracing industry.
According to the Kentucky Horse Racing Commission, as of May 2021, the machines have taken in more than $12 billion. More than 4,200 operate in six locations. Average daily handle for each machine is more than $4,000.
