LOUISVILLE, Ky. — Churchill Downs introduced Thursday morning it’ll open a casino-style “historic horse racing” betting facility in downtown Louisville, however the massive information could have some asking this: What precisely is historic horse racing?
That is a very good query, particularly in a state like Kentucky that largely outlaws most types of playing.
Here is what to learn about historic horse racing, or HHR:
What’s historic horse racing?
Historic horse racing typically refers to playing that enables gamers to guess on replays of horse races.
Gamers use slot-like historic racing terminals, or HRTs, to put their bets.
If betting on replays of horse races sounds fairly foolish and never the supply of a lot enterprise, assume once more.
Some estimates have discovered the horse racing trade has obtained over $700 million in direct income from HHR over time and that HHR betting has grown to turn into a multi-billion greenback trade.
How do historic racing machines work?
Historic horse racing machines fluctuate enormously, however all are primarily based on the precise outcomes of randomized previous races.
Some machines enable customers to take a look at the horses’ odds and place particular varieties of wagers, whereas others are just about indistinguishable from slot machines, permitting customers to easily push a button each few seconds for every play.
Why has historic horse racing been the supply of controversy?
A coalition of teams have argued Kentucky is getting shortchanged with regards to profiting off historic horse racing.
Led by the Kentucky Middle for Financial Coverage, the coalition of 17 teams instructed state lawmakers this yr the commonwealth is taxing the HHR machines at a a lot decrease price than slot machines in different states, shedding out on the potential to extend the state’s annual tax income by $91 million.
Particularly, the coalition referred to as the HHR machines “vastly underneath taxed” in Kentucky at 1.5% of the overall deal with wagered, or 18% of the gross fee after winnings are paid — with 10% going again to the horse racing trade to help elevated purses and eight% going to the state’s Common Fund.
The coalition cited surrounding states having a tax price on gross fee from slot machines that ranges from 33% to 55%.
Kentucky’s tax price on the overall deal with for stay horse racing is greater than double HHR at 3.5%, whereas 70% of gross fee from the Kentucky Lottery goes to the state’s price range — almost 9 occasions increased than the 8% for HHR machines.
Within the letter despatched this previous winter to state lawmakers, the coalition argued that legalizing HHR “however failing to adequately tax it’ll proceed to shortchange colleges, well being care, infrastructure and different very important providers whereas giving the inexperienced gentle to additional broaden this quickly rising type of playing throughout the commonwealth.”
The coalition added HHR betting has grown dramatically in recent times to the purpose that it exceeded $2 billion in 2020 — greater than the lottery and horse racing mixed — and will surpass $3 billion this yr if amenities are allowed to remain open.
The staying open query arose after the Kentucky Supreme Court docket dominated final yr that HHR machines don’t represent authorized “pari-mutuel” wagering underneath present regulation.
However lawmakers handed, and Gov. Andy Beshear signed into regulation, a invoice throughout the 2021 Common Meeting session to change the definition of pari-mutuel wagering in state statute to incorporate the HHR machines.
The invoice handed by a slim majority after Churchill Downs promised to work with lawmakers on the problem of the HHR tax price.
What’s taking place with HHR tax price discussions?
State Rep. Kim King, R-Harrodsburg, has prefiled a invoice forward of the 2022 legislative session to boost the tax price for HHR.
A job pressure of legislators has additionally met this yr to review and think about adjustments to the speed.
The place are different HHR venues in Louisville?
Churchill Downs at present operates one different historic horse racing betting facility in Louisville.
Derby Metropolis Gaming opened in 2018 in Newburg alongside Poplar Degree Highway and has a deliberate growth of its personal within the works, with a resort, restaurant and different additions coming to that facility.
As for the newly introduced downtown facility, Churchill Downs stated it’ll open a 43,000-square-foot historic racing machine leisure venue at 140 S. Fourth St., on the busy nook of Fourth and Market streets.
Building on “Derby Metropolis Gaming Downtown” will start later this yr, with these behind the challenge eyeing a gap in 2023.
The brand new venue will embody 500 historic horse racing machines, together with an open-air gaming space and 200 parking areas. The challenge is predicted to create 350 building jobs and 100 everlasting positions after opening.
Reporters Lucas Aulbach and Joe Sonka contributed to this story.
Attain Billy Kobin at email@example.com.