LOUISVILLE, Ky. (WDRB) – Kentucky regulators have hit Churchill Downs Inc. with thousands of dollars in fines after discovering a flaw in the wagering system at Derby City Gaming, the company’s new historical horse racing facility in Louisville.
The casino-like facility, which opened in September at a cost of $65 million, has about 900 terminals that resemble slot machines, but actually offer the chance to bet on previously run horse races through pari-mutuel wagering.
But the wagering system at the facility has been including races in which a horse in the field scratched -- or withdrew from the race – in violation of state regulations, according to an Oct. 26 letter from the Kentucky Horse Racing Commission.
The commission said it issued fines of $1,000 per day since the facility opened on Sept. 10, which would be $52,000 through the letter’s issuance on Oct. 26.
A Churchill Downs spokesman hasn’t responded to a phone call and email seeking comment on Thursday. Another spokesman didn't immediately respond to a text message.
In a statement Thursday, Churchill Downs acknowledged a "technical violation" but emphasized that the machines at Derby City Gaming have "never enabled any wagers on a horse that did not run in a race."
Churchill Downs said it's working to fix the error and that Derby City Gaming will operate as normal.
The commission said it has no evidence that any patron “has suffered monetary loss” as a result of the violation, but that it continues to look into the matter and more penalties are possible – up to an order to close the facility – if additional violations are found or it’s determined that patrons are wagering “to their detriment.”
The commission’s findings were based on an inspection and an Oct. 24 affidavit by Bill Mudd, the company’s president and chief operating officer, according to the Oct. 26 letter.
State regulations limit historical horse races to those that concluded without scratches, disqualifications or dead-heat finishes.
The commission's action was first reported by Bloodhorse on Thursday.
Below is the full statement from Churchill Downs:
"We are working diligently with the Kentucky Horse Racing Commission (KHRC) to address the technical violation of allowing wagers on historical races from which runners were scratched after entries were taken. Importantly, however, the historical racing machines in use at Derby City Gaming have never enabled any wagers on a horse that did not run in a race. If a horse was scratched at any time prior to a race, that horse was removed from the field and was not eligible for wagering. As the KHRC letter acknowledges, no patrons were harmed because they were only given the option to wager on horses that ran in the race. We are working collaboratively with the KHRC and our development partner to correct this technical matter. Derby City Gaming will continue operating as normal."
Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.
