Newport Gaming and Racing CDI photo

Newport Gaming and Racing offers 500 "Vegas-style" historical horse racing machines. The Churchill Downs-owned venue opened Oct. 2, 2020.

LOUISVILLE, Ky. (WDRB) -- A bill aimed at legalizing Kentucky's racetrack-owned gaming venues shot out of the starting gate on Thursday with an 8-0 vote in a committee of the state Senate.

SB 120 now heads to the Senate floor for a vote by the full 38-member body as soon as next week.

Lawmakers advanced the bill over the objection of the socially conservative Family Foundation of Kentucky, which says that Kentucky's roughly 3,000 historical horse racing machines are basically slots and can be authorized only by amending the state constitution, which SB 120 would not.

"I think we are in, certainly, a gray area, and I do believe we will see this resolved in the court," said Sen. Tom Buford, R-Nicholasville, as he cast his 'yes' vote for bill in the Senate's licensing and occupations committee.

The Kentucky Supreme Court in September upended the booming gaming industry by ruling that the machines do not constitute pari-mutuel wagering, the form of betting that undergirds live horse racing and is legal in Kentucky. Casino gambling, in which players bet against the house, is not legal in Kentucky.

The court said in its September opinion that only the legislature can change the definition of "pari-mutuel wagering" to include historical horse racing.

Attorney Bill Lear, a trustee of Keeneland Association, called that an "engraved invitation" for lawmakers to fix the legal ambiguity by passing SB 120.

While the machines are nearly indistinguishable from slots, the idea is that they're an exotic form of horse racing. The results they generate are based on old horse races invisible to the player. An electronic spin is actually a bet on horses, according to the industry and its regulator, the state horse racing commission.

The bill expands what's considered "pari-mutuel" to match how the machines operate. For example, people playing the machines at the same time need not be betting on the same old horse races, as players can wager "on different races or sets of races." Like in live racing, betting pools are established to pay the winners from the losses of the others, but a distinct pool need not be established for each race.

Instead, the money can be paid into a perpetual, common pot which "may be paid out incrementally over time" as approved by the state horse racing commission, according to the bill.

Martin Cothran, a policy analyst with the Family Foundation, told the committee that the bill makes a "preposterous" attempt to label historical horse racing as pari-mutuel, when it is not "by any other definition you can find."

"Rather than the horse tracks and their allies on the (horse racing) commission changing their actions to bring them into alignment with the law, we are being asked in this bill to bring the law into alignment with the actions of the tracks," Cothran said.

Keeneland and the Red Mile decided last month to temporarily close their gaming facility in Lexington because of the legal uncertainty. The five other gaming venues -- owned by Churchill Downs, Kentucky Downs and Ellis Park -- remain open for business. 

The tracks and the horse racing commission are awaiting instructions from Franklin Circuit Judge Thomas Wingate, who is charged with implementing the Supreme Court's decision.

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2021 WDRB Media. All rights reserved.