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Nevada Gaming Regulators Come Up With Workaround For Kentucky Derby Betting

James Murphy
by in Horses on
  • The Nevada Gaming Control Board has recommended changes to the way that horse racing bets are graded and paid.
  • Previously, race books were required to wait until confirmation was received from licensed disseminators to pay bets.
  • One reason for the proposed change is to allow Nevada racebooks to accept Kentucky Derby wagers despite an going contract dispute with Churchill Downs.

It might have taken a once-in-a-lifetime pandemic to make it happen, but Nevada’s traditionally ossified gaming regulation bureaucracy has started to move into the 21st Century. Last week we reported on what at the time appeared to be an effort to allow Nevada racebooks more latitude in the information they use to grade winning bets. The move to eliminate the requirement that all horse wagers be graded only on results provided by licensed disseminators could in theory to expedite the payment of winning bets but it now appears that there was much more to it than meets the eye.

A little backstory is necessary here–the Nevada Pari-Mutuel Association represents the state’s race and sportsbook operators to facilitate their access to the same parimutuel wagering pools that horseplayers at various tracks bet into. Before the early 1990’s, racebooks in the Silver State didn’t have access to parimutuel pools which meant that they had to book their own action. The move to parimutuel wagering meant that players in Nevada would have access to same payouts and betting options as their counterparts at the track or in a simulcasting facility.

This arrangement requires that the state’s racebooks–through the aforementioned Nevada Pari-Mutuel Association–have contractual arrangements with the various racetracks and racing associations around the country. These arrangements allow not only co-mingling of the parimutuel pools but other perks like live track video and betting information. It also means that at times tracks and state racing associations seek to ‘strong arm’ Nevada bookmakers to get higher–and in some instances absurd–simulcasting fees. Sometimes the Nevada racebooks will quickly acquiesce to demands but not always.

Which brings us back to the current story. Nevada’s racebooks are in the midst of an ongoing contract dispute with Churchill Downs that dates back to October 27, 2019. Neither side has been especially transparent about the areas of contention but more often than not it comes down to the price paid for the simulcasting signal. In early November of last year, Churchill Downs’ parent company acknowledged the dispute in a press release without giving too much information as to what was going on:

“Unfortunately, the Churchill Downs Fall Meet races are not being distributed to the Nevada pari-mutuel facilities due to the lack of an executed agreement. We would like to believe that this dispute can be resolved in the future so horse racing fans in Nevada may once again wager on races taking place at the home of the Kentucky Derby.”

The Nevada Pari-Mutuel Association did not respond with a comment at the time, probably because they didn’t need to.


As noted in the statement from CDI that means no betting on races from Churchill Downs at Nevada racebooks. Churchill Downs has the leverage of the biggest race of the year among mainstream sports fans, the Kentucky Derby. Since the contract dispute began in October, the Nevada interests presumably thought they could ‘slow play’ the situation with the Kentucky Derby more than six months away. That was before the COVID-19 pandemic disrupted everything in the gaming and sports industries. Nevada’s gaming industry was shut down for over two months and meanwhile the Kentucky Derby was rescheduled to September 5. It’s unclear whether there’s been any effort to work out a deal or not. It could be that the two entities have enough to worry about dealing with their own situations.

So what does all of this have to do with the changes recommended by the Nevada Gaming Control Board modifying the Nevada Gaming Commission’s Regulation 22? Simple–it gives the state’s racebooks a ‘workaround’ for booking the race. Mike Brunker explains the thinking in today’s Las Vegas Review Journal:

Nevada gaming regulators are considering an 11th-hour intervention that would allow the state’s racebooks to have betting on this year’s Kentucky Derby despite an ongoing contract dispute with Churchill Downs.

But to do so, the operators will have to step back 30 years in time, to the days when Las Vegas racebooks were really run by bookies. It also will be a return to the not-really-so-good-old days for horseplayers, when books often set low limits on exotic payouts and wagering could only be done in person.

Even so, it clearly beats the alternative, which would have been for the most famous race in the U.S. — and quite possibly the world — to be run without a single betting dollar entering the pools via Nevada’s gaming establishments.

Simply put–racebooks can put the national broadcast of the Kentucky Derby and use the results from the NBC broadcast for grading purposes. Casino racebooks have plenty of other issues to deal with as South Point racebook manager Mary Jungers explains:

“Everything is different. We have to control the crowd for social distancing. … There are just a lot of unknowns at this point. But I guess it’s better than nothing.”

Given the circumstances, it’s difficult to imagine a big handle on the Kentucky Derby but at least they’re able to book the race. If nothing else, I guess it can be considered a symbolic victory of some sorts. But before we give too much credit to Nevada’s gaming regulators–keep in mind that parimutuel betting via mobile devices is still not permitted in the Silver State. That goes back to the outdated casino operator’s mentality that you have to force patrons to physically come into the property. In the COVID-19 era that’s a liability, not an asset. The smart play for gaming operators now is to find revenue streams that *don’t* require players to be physically present in the casino. Hopefully, the ridiculous ‘no mobile parimutuel betting’ will be stricken from the books soon.

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