The Role of Kentucky Racing Commission in Pari-Mutuel Gambling
The Kentucky Racing Commission provides a prominent example of the comprehensiveness of state regulation of the pari-mutuel industry. Laws that fall under the enforcement authority of this commission pertain to virtually every aspect of races and include the presence and placement of specific race officials such as timers, placing judges, starters, and patrol judges. There also are laws governing owners, trainers, jockeys, horses, and ticket sellers. Individuals must meet standards set by the commission for each position and be licensed in order to be eligible to participate in pari-mutuel betting events. The commission itself has the power to deny, suspend, revoke, or declare void the license of any person involved in a violation of an administrative regulation. The commission also approves three stewards who make determinations regarding all questions, disputes, protests, complaints, or objections that arise during a race meeting. They are granted extensive disciplinary powers: For example, the stewards can declare a horse ineligible or a race void.
One of the key controversies in pari-mutuel gambling are proposals to introduce electronic gambling devices (EGD’s), such as slot machines, at racetracks. Some track owners maintain that increased competition from state lotteries, nearby casinos, and other forms of gambling have hurt their business and that EGD’s are needed in order to allow their businesses to survive. Opponents within and outside of the industry counter that by introducing such games, racetracks in effect become mini-casinos. Four states— Delaware, South Carolina, Rhode Island, and West Virginia— have legalized the operation of EGD’s at racetrack facilities. Several other states are currently considering similar provisions.
Federal involvement in pari-mutuel regulation focuses on issues of interstate and foreign commerce. Specifically, the federal government provides regulation through two federal statutes that address or exempt interstate wagering within the pari-mutuel industry. According to the Interstate Horse Wagering Act of 1978 22 and in compliance with the “Wire Act” of 1961, 23 racetracks can broadcast events to other licensed establishments and provide for a commingling of wagers on races. The industry broadcasts these races through satellite technology to other racetracks and off track betting parlors (OTBs). Bettors can then place wagers on a particular race hosted at a participating track that may be located outside the state. This system has enabled the industry to create larger wagering pools and therefore larger purses. Under the authority provided by the federal government within these two statutes, several states have permitted the pari-mutuel industry to broadcast races in the home and have also provided for account wagering. Further discussion on account wagering and at-home devices is included in the chapter on the “Gambling in the United States.”
Several organizations set industry standards and codes of conduct. As early as 1934, racing commissioners from a number of states formed the National Association of State Racing Commissioners (NASRC) to provide a more coordinated approach to regulatory efforts. Out of this body grew the Association of Racing Commissioners International, Inc. (RCI). Today, RCI’s membership includes commissioners from 24 states and 5 neighboring territories or countries. 24 Other industry organizations include the National Thoroughbred Racing Association, the Thoroughbred Racing Associations of North America, The American Quarter Horse Association and the American Horse Council. These organizations address issues including integrity of racing, underage concerns, and concerns regarding problem and pathological gambling.
22 15 U. S. C. § 3001-3007. 23 18 U. S. C. § 1084. 24 Supra note 1. 25 Sports wagering refers to betting on the outcome of a contest. People bet on the outcome of many events, whether the outcome of the Academy Awards, individual athletic performances, or team play. For the purposes of this section on sports wagering regulation, the term does not cover pari-mutuel activity, which is legal in many states.