Patrons play the Instant Racing machines at Ellis Park (Photo courtesy Ellis Park Facebook).
Slot machines aren’t legal in Kentucky. Yet strangely enough, visitors to Ellis Park or Kentucky Downs can see gamblers lined up at rows and rows of slot machines, pumping in money and pushing buttons, watching the reels spin round and round, out in the open where anyone can see them. How are they able to get away with this? The games that patrons of Ellis Park and Kentucky Downs are playing aren’t slot machines - at least not in the legal sense. They are called Instant Racing machines, and they are designed to comport with Kentucky’s gambling laws.
Instant Racing was invented at Oaklawn Park in Arkansas back in 2000. A collaboration between Oaklawn’s general manager and engineers from AmTote, the games were designed to help Oaklawn boost revenue and add to the dwindling purses there. The concept was an electronic gaming machine whose core mechanism was built around existing gambling laws - they needed to utilize the same pari-mutuel wagering structure that was permitted in horse racing. The solution: a slot machine that uses random, actual historical horse races to determine who wins.
The games work like this: once a bettor puts in their money, they are asked to choose three horses from a ten-horse field. They aren’t shown the horses’ names or told when the race took place. They are permitted to look at some strange pie charts that have some real data on the horses from that actual race. This element could be included to make bettors feel like they have a chance at handicapping, or it could be to further the idea that these are games of skill and not chance. Either way, it is basically useless. Most people never even look at it.
THE ENTRANCE TO OAKLAWN'S INSTANT RACING PARLOR
Next you choose the type of bet you want. You can bet the equivalent of exactas, trifectas, win bets, and another bet that allows you to pick two of the top three finishers; or any combination of those. Once the bettor selects their bets, they can choose to watch the video of the random race they were betting on, or watch a very brief clip of the horses crossing the finish line. The reels spin, the numbers appear, and the bells and chimes go off. The entire experience feels almost exactly like playing a slot machine.
The pari-mutuel part, perhaps the most important element as it pertains to Kentucky law, has to do with how winners are paid out. Rather than collecting money from the house when a bettor hits their numbers, they are paid from a collective pot of money that draws from everyone else playing an Instant Racing machine in that location at once. The pot builds and builds until someone hits, and then that person wins the pot. The house keeps their takeout, just like they do in normal live racing wagering; in this case it amounts to about 9%, which is better than most racetracks and a little worse than most slot machines.
Instant Racing machines also tend to do less business than regular slot machines. A normal slot machine on average earns about $300 a day. An Instant Racing machine at Oaklawn earns about $170. The machines at Ellis Park earn about $41. The disparity has to do with the market. At Oaklawn, the Instant Racing section of the racetrack feels a lot like a very big casino, and even has electronic blackjack, poker and craps games to go along with the rows of Instant Racing machines. (Although Oaklawn just announced the closure of their electronic poker room to make room for more Instant Racing machines, a trend that also mirrors what happens in most traditional casinos between slots and table games) Additionally, Oakawn’s closest rival is the town of Tunica, Miss., home to several full-size commercial gaming resorts. Tunica is over three hours away. Ellis Park is much closer to several gambling options in every direction. The market is much tougher.
Currently, there is a legal challenge to the use of Instant Racing in Kentucky being brought on by The Family Foundation, which alleges that Instant Racing is a game of chance and isn’t a legitimate pari-mutuel gambling operation. That case has been moving through the courts for years now but has finally been scheduled a date later this summer to be heard by the Kentucky Supreme Court. Whatever happens in that case will be important for the future not only of mid-level tracks like Ellis Park but even tracks like Keeneland Race Course and Churchill Downs, who have watched the Instant Racing saga patiently from the sidelines, choosing instead to put their eggs in the basket of lobbying for legislative approval for traditional slot machines.
CROWDS GATHER AROUND ELLIS PARK'S INSTANT RACING MACHINES
Meanwhile Instant Racing is taking off among other mid-level, struggling racetracks. Already in use in Arkansas and Kentucky, Oregon has already agreed to allow the machines at Portland Meadows, a bill has been introduced in the New Jersey legislature to allow the machines in that state, and lawmakers in Michigan were recently treated to a demonstration of how the Instant Racing machines work - right in the capitol in Lansing!
The reason for all the interest? In addition to being an end-around to existing gambling laws, the Instant Racing project in Arkansas has been, by any measure you can think of, a success. Purses have increased for races, but so has attendance and handle during the live meet. The “casino” at Oaklawn has expanded twice since Instant Racing was first introduced, at a cost of several million dollars to Oaklawn. All money well spent, they argue, since the gaming center fuels the rest of the operation. Prior to Instant Racing, the Cella family was digging into their own pockets to supplement racing purses. For decades, votes to legalize other forms of gambling at the racetrack failed, again and again. Finally in 2000, voters approved Instant Racing by the narrowest of margins. Since that vote, Arkansas has expanded their legal forms of gambling from pari-mutuel to a statewide lottery. Today, the money at Oaklawn is going in the opposite direction - back into the Cella family’s pockets. And racetracks around the country have noticed.
Instant Racing machines are doing a lot for struggling racetracks right now, but they are doing even more to highlight the ridiculousness and hypocrisy of a lot of the gambling laws and regulations around the country. Hopefully in addition to keeping some quality racetracks in operation, their expansion can also help various states confront their own outdated and pointless moralistic gambling legislation and bring some much needed revenue and jobs to the states that need them the most.