Churchill Downs bringing Derby City Gaming-style betting venue to downtown Louisville
| Louisville Courier Journal
Churchill Downs is betting on downtown Louisville with plans to bring a massive casino-style “historical horse racing” betting facility to the heart of the city.
The iconic Louisville racetrack announced Thursday that it plans to open a 43,000-square-foot historical racing machine entertainment venue at the busy corner of Fourth and Market streets. Construction will begin this year, with those behind the project eyeing an opening in 2023.
The plan for “Derby City Gaming Downtown” includes 500 historical horse racing machines, which mimic slot machines and allow bettors to place wagers on replays of old horse races, along with an open-air gaming area and 200 parking spaces. The project is expected to create 350 construction jobs and 100 permanent positions after opening.
Speaking at a press conference announcing the plans Thursday morning, Louisville Mayor Greg Fischer pitched the development as a key moment for downtown’s entertainment district – the project is just two blocks from the Fourth Street Live bar and restaurant strip – and a sign that the area is open for business.
‘Historical horse racing’: What is it and how do the betting machines work?
“While the past few years of the pandemic and protests for racial justice presented many challenges for our country, our state, our city and our downtown spaces, it also provided us with a great inflection point for reimagining and reflecting on what exactly we want our downtown, our city and our state to be, and most importantly, the people who live here in our great community,” Fischer told the crowd at the Kentucky International Convention Center, which will stand diagonal to the new betting facility at the bustling downtown corner.
Any development in the Bluegrass State that involves gambling is going to raise some eyebrows, as casino gaming is illegal in Kentucky.
But historical horse racing venues have been given the green light from the state legislature to operate, with lawmakers allowing bets on replays of horse races. The facilities had faced some opposition, with the Kentucky Supreme Court briefly deeming them illegal in 2020, but the Kentucky legislature passed a bill to formally legalize them this year.
The terminals are similar to slot machines commonly found at casinos, though the state gets just 8% of gross commission from bets placed on the terminals while an additional 10% is given to the horse racing industry to increase purses. Slot machines used in casinos in nearby cities have a gross commission tax rate between 33% and 55%, and state Rep. Kim King (R-Harrodsburg) has prefiled a bill that would raise the rate in 2022.
The similarities between Derby City Gaming and casinos that are outlawed in Kentucky have not gone unnoticed. Morgan McGarvey, the state’s Senate Democratic leader, took to Twitter after the announcement to voice his support for broader legalization of gambling.
“These are slot machines,” McGarvey wrote. “Let’s call them what they are, tax them for what they are, and allow other forms of gaming so we can have actual casinos and bet on sports.”
Churchill Downs also has pledged to donate $1 million to the West End Opportunity Partnership to finance economic development projects in western Louisville. That partnership recently worked to establish a tax-increment financing district in which 80% of tax revenue in nine West End neighborhoods would be returned to the group, which would then reinvest it in the region.
State Sen. Gerald Neal, who helped get that legislation approved, lauded the development at Thursday’s event, calling it an investment that will do more than help downtown.
“A strong Louisville is a strong Kentucky … (and) a strong west Louisville is a strong Louisville,” Neal said to applause. “We’re also looking for a long relationship, and involved and substantive relationship with Churchill Downs, and we trust that that will happen.”
Churchill Downs CEO Bill Carstanjen said racetrack officials are “particularly excited” about the plan.
“Our HRM expansion will be a win for the entire community in the Louisville area and will create $10 to $12 million per year in additional purse money for Churchill Downs Racetrack,” he said in a statement. “It is important that Louisville is a city that is thriving — a great place to live, work and visit and we are committed to helping create economic vibrancy for every area of our community. The West End Opportunity Partnership and our collaboration with OneWest can help us responsibly and sustainably achieve that vision.”
Churchill Downs operates one other historical horse racing betting facility in Louisville. Derby City Gaming is open in Newburg along Poplar Level Road and has a planned expansion of its own in the works, with a hotel, restaurant and other additions coming to that facility, which opened in 2018.
The Louisville racetrack company has had a busy week. On Wednesday, Churchill announced it had sold a 326-acre property in Arlington Heights, Illinois, to the Chicago Bears for $197.2 million, the next step in a potential move to a new stadium for the NFL franchise.