Request By:
Hon. Vic Hellard, Jr., Director
Legislative Research Commission
Third Floor
Capitol Building
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; Christopher W. Johnson, Assistant Attorney General
The Legislative Research Commission has requested the opinion of this office as to the legality of the "teletrack" system of wagering under currently existing law. The teletrack system consists of opening licensed race tracks for the purpose of wagering on televised races being conducted at another track.
Although pari-mutuel wagering on horse races is not prohibited by the Constitutional provision banning lotteries,
Commonwealth v. Kentucky Jockey Club, 238 Ky. 739, 38 W.W.2d 987 (1931), it is without question that the legislature could entirely prohibit such wagering.
State Racing Commission v. Latonia Agricultural Association, 136 Ky. 173, 123 S.W. 681 (1909). Indeed, the legislature has made all gambling other than pari-mutuel wagering conducted by licensees of the Racing Commission or the Harness Commission illegal. KRS Chapter 528. The one exception is KRS 528.010(10), purporting to legalize "charitable gaming," a part of which this Office found to be unconstitutional in OAG 80-408.
KRS 230.215(2) expresses the legislature's intent to grant the Racing Commission full discretionary powers and KRS 230.260(3) gives the Racing Commission "full authority to prescribe rules, regulations, and conditions under which . . . racing . . . shall be conducted", and KRS 230.361(1) directs the Racing Commission to "adopt rules governing and regulating mutuel wagering on . . . races . . . under what is known as the pari-mutuel system of wagering. "
Accordingly, the Racing Commission has promulgated Rule XI, 810 KAR 1:011, regulating pari-mutuel wagering conducted by its racing association licensees. Two sections of this rule are relevant to the question presented:
Section 1. Pari-mutuel system of wagering required. Each association licensed to conduct racing in the state may permit wagering only on races conducted by such association on the grounds of such association; no such association may accept wagers on races conducted elsewhere by another association.
* * *
Section 11. Pari-mutuel ticket sales. (1) (No pari-mutuel tickets shall be sold except by the association conducting the races on which such wagers are made, . . . ." [Emphasis added]. 810 KAR 1:011 §§ 1 and 11(1).
Under this regulation the teletrack system of wagering is prohibited since the wagering is to be conducted by a racing association other than the association conducting a race. Since this regulation also prohibits the association conducting the race from accepting wagers anywhere but on their own grounds, that assocition may not make use of other associations' facilities for the purpose of accepting wagers. This regulation effectively prohibits the teletrack system of wagering.
Even in absence of this regulation, currently existing statutes effectively prohibit the teletrack system. KRS 230. 261 reads in pertinent part as follows:
. . . [Pari-mutuel] wagering shall be conducted only by a [recing association] and only upon the licensed premises and on the dates and hours for which racing has been authorized by the Commission." [Emphasis added].
The legislature has clarified what is meant by "licensed premises" in another statute:
KRS 528.110. Horse races, messenger betting prohibited. Exception. (1) Any person who, either for himself or as agent or employee of another, wagers money or anything of value on a horse race run or about to be run or advertised, posted or reported as being run at any racetrack in or out of this state, or who engages in the occupation of receiving, making, transmitting, or negotiating, either in person or by mesenger, telephone, or telegraph, wagers on horse races run or about to be run or advertised, posted or reported as being run or about to be run at any racetrack in or out of the state, shall, except in the case of wagers made within the enclosure of a racetrack licensed by the state racing commission during an authorized race meeting at that track, . . . be guilty of a Class A misdemeanor. " [Emphasis added].
This statute makes it clear that only the racing association holding the race may accept wagers and such wagers must be made "within the enclosure" of the licensed track where the race is being held.
The Kentucky Court of Appeals has held that a messenger betting service, operating outside racetrack premises, which accepted money to be wagered and for a fee took that money to the track and made the wager, did not violate the statute because the wager was made at the track.
Thomas v. Commonwealth, Ky. App., 563 S.W.2d 491 (1978); accord,
State v. Countdown, Inc., La., 319 So.2d 924 (1975); contra,
Schnoor v. Griffin, 79 N.M. 86, 439 P.2d 922 (1968).
Apparently in response to the Thomas case, the legislature in 1978 enacted KRS 528.120:
"Off-track acceptance of money for parimutuel wagering.
(1) No person, as a business or for any compensation, shall directly or indirectly, accept any thing of value to be wagered or to be transmitted or delivered for wager to any pari-mutuel wagering enterprises, or participate in any such transaction.
(2) As used herein, "person" shall mean and include any individual, partnership, association, joint stock association or trust, corporation or other business entity, whether incorporated or not.
(3) Any person violating any of the provisions of this section shall be guilty of a Class A misdemeanor. "
Although neither Kentucky appellate court has had an opportunity to review this statute, an identical Illinois statute has been attacked as being an unconstitutional prohibition of a legitimate enterprise. The Illinois Supreme Court upheld the statute saying that the state could constitutionally prohibit messenger betting services pursuant to its police power.
Finish Line Express, Inc. v City of Chicago, 72 Ill .2d 131, 19 Ill. Dec. 626, 379 N.E.2d 290 (1978).
In summation, under present law, pari-mutuel wagering may be conducted only by a licensed racing association holding a race and such wagering can be conducted only on that association's "licensed premises" or "within the enclosure" of the track where the race is being held. No association may conduct wagering on any race held by another association. A messenger service type of operation, where money is given to a person and that person transmits it to the track and wagers it there is prohibited.
Any change in the current law is, of course, within the province of the Kentucky General Assembly, which has the authority to legalize a "teletrack" system of wagering or some other approach to off track wagering if it so desires.