By: Ben Childers
Keeneland, Central Kentucky’s most renown horse-racing enterprise, first announced its intention to build a racing facility in Corbin, Kentucky on February 14, 2013.[i] Under this initial proposal, Keeneland and partner Full House Resorts sought to purchase the Thunder Ridge track in Prestonsburg and relocate that facility and racing license to the new Corbin location.[ii] This ambitious plan incited excitement over the prospect of a “top-flight racetrack” full of “glamour and prestige” coming to Eastern Kentucky.[iii] However, the endeavor soon stalled following a change in the character of the partnership and a battle over the most critical element: a racing license from the Kentucky Horse Racing Commission.[iv]
In Kentucky, only organizations holding licenses approved by the Kentucky Horse Racing Commission may engage in “pari-mutuel racing.”[v] The allocation of such licenses is paramount to the success of any racing-centered operation in Kentucky, as these facilities cannot exist without one.[vi] The success of licensed facilities is not limited to live races, but is further bolstered by the support of gambling on historical races “that have been run sometime in the past at an approved racing facility.”[vii] Betting on these non-live races was sanctioned by the Kentucky Supreme Court in 2014, given their character as wagers on pari-mutuel, legitimate races.[viii] This paradigm laid the foundation for a legal challenge over the granting of licenses when Keeneland announced that instead of transferring the existing license from Thunder Ridge, the company would seek a new, separate license for the Corbin track.[ix]
Initially, Appalachian Racing, LLC, owner of Thunder Ridge, was granted a motion in Floyd County Circuit Court temporarily prohibiting the Commission from granting a new license to Keeneland.[x] The Kentucky Supreme Court overturned this decision, determining that “nothing…authorize[d] the Floyd Circuit Court to prevent the Commission from considering Keeneland's application.”[xi] The Court’s decision centered around the premise that the Commission exercised a purely executive function, and thus, the Floyd Circuit could not enjoin it from acting legislatively when it did not, in fact, act legislatively.[xii] However, this effective victory to Keeneland was awarded four years ago and there still has not been a license for the Corbin track allotted to Keeneland by the Commission.[xiii]
The Commission, and the Administrative Regulations behind it, should be proactive in their efforts to capitalize on Kentucky’s horse industry and enable its expansion into new markets. According to the University of Kentucky Ag Equine Programs, Kentucky’s equine industry yielded an economic impact of nearly $3 billion in 2013 alone for the state.[xiv] Narrowed to Keeneland and Fayette County, specifically, the annual impact was nearly $600 million, with $4.8 million in taxes being generated for the state and local government during just the fall meet.[xv] However, this lucrative success is not experienced across the state, but is instead isolated to a small number of counties.[xvi] Looking at “equine acres” within a county, Fayette County leads the state at 89,000 acres, Bourbon is a distant second at 48,700, Woodford has 44,200 in third, and Scott only has 26,000 acres.[xvii] The tenth highest county, Carter, has only 16,400 acres; put another way, the equine acreage difference among even the top ten counties is 82%.[xviii]
If the Commission were to take affirmative action by granting more racing licenses and enabling significant expansion of the equine industry into other parts of the state, the economic impact could be immense. Particularly in Corbin, and other Eastern Kentucky communities, the potential opportunities that a racing license presents cannot be understated. Bringing a multi-million-dollar establishment, and its accompanying jobs, into a city with a $31,908 median household income could alter the socioeconomic character of the entire region.[xix] While the progress that has been anticipated for over six years, since Keeneland’s first announcement, has not yet been realized for Southeastern Kentucky, this economic spark is one decision of the Commission away from coming to fruition.[xx]
[i] Tom LaMarra, Keeneland: Track Plan About Horse Industry, BloodHorse (Feb. 15, 2013), https://www.bloodhorse.com/horse-racing/articles/123054/keeneland-track-plan-about-horse-industry [https://perma.cc/3JCZ-84WB].
[ii] Jeff Noble, Keeneland to Build Race Track Near Corbin, The Sentinel Echo (Fed. 21, 2013), https://www.sentinel-echo.com/news/keeneland-to-build-race-track-near-corbin/article_7b808aa3-78c4-5e09-b0e9-f08ba541e148.html [https://perma.cc/M2SL-LYTE].
[iii] Janet Patton, Exclusive: Keeneland Aims to Build Prime Quarter Horse Racetrack Near Corbin, Lexington Herald Leader (Feb. 14, 2013), https://www.kentucky.com/article44403660.html.
[iv] Kristina Smith, Judge Agrees to Pull Reins Back on Proposed Race Track in Corbin, Richmond Register (Dec. 2, 2015), https://www.richmondregister.com/news/judge-agrees-to-pull-reins-back-on-proposed-race-track-in-corbin/article_c94e784c-9916-11e5-9bd3-3b65f4a4ee1e.html [https://perma.cc/T4W7-8862].
[v] 810 Ky. Admin. Regs. 3:020 (2019).
[vi] Matt Hegarty, Kentucky Racetrack Interests Team Up to Apply for Casino and Harness Track License, DRF (Sep. 21, 2020), https://www.drf.com/news/kentucky-racetrack-interests-team-apply-casino-and-harness-track-license [https://perma.cc/8PAN-W2PT].
[vii] Appalachian Racing, LLC v. Family Tr. Found. of Ky., Inc., 423 S.W.3d 726, 730 (Ky. 2014).
[viii] Id.
[ix] Smith, supra note iv.
[x] Id.
[xi] Appalachian Racing, LLC. v. Commw., 504 S.W.3d 1, 5–6 (Ky. 2016).
[xii] Id.
[xiii] Erin Cox, Keeneland announces new partner, new plans for facilities in Corbin, Williamsburg, The Sentinel Echo (Sep. 21, 2020), https://www.sentinel-echo.com/news/keeneland-announces-new-partner-new-plans-for-facilities-in-corbin-williamsburg/article_37ac6e38-fc2d-11ea-8463-2bdfed3573b5.html [https://perma.cc/2473-YFKP].
[xiv] Holly Wiemers, Kentucky's Equine Industry has $3 Billion Economic Impact, University of Kentucky College of Agriculture (Sep. 2013), http://equine.ca.uky.edu/news-story/kentuckys-equine-industry-has-3-billion-economic-impact [https://perma.cc/7B73-7NSN].
[xv] Janet Patton, Study: Keeneland contributes almost $600 million a year to Lexington's economy, Lexington Herald Leader (Apr. 23, 2015), https://www.kentucky.com/news/business/article44595774.html.
[xvi] Wiemers, supra note xiv.
[xvii] Id.
[xviii] Id.
[xix] Census Reporter Profile Page for Corbin, KY, Census Reporter (last viewed Sep. 30, 2020), https://censusreporter.org/profiles/16000US2117362-corbin-ky/ [https://perma.cc/W23P-MAZW].
[xx] LaMarra, supra note i.