Kentucky’s skill game ban raises ethics questions

Kentucky lawmakers have approved a bill that would ban skill games found at bars and restaurants across the state.

The measure (House Bill 594) passed on a 29-6 vote Tuesday. On Thursday, Gov. Andy Beshear signed the legislation.

But how the bill got through the legislative process in the first place is raising questions about whether Kentucky ethics laws need to be addressed. 

Both Kentucky House Speaker David Osborne and Rep. Matthew Koch, who chairs the House Standing Committee on Licensing, Occupations, & Administrative Regulations that passed the skill game ban, have ties to Kentucky’s massive horse racing industry.

Osborne owns and operates Deerfield Farm, a thoroughbred racing and breeding farm. Koch is also a horse farmer, according to his legislative bio. 

Those are important ties to note, considering the new law banning skill games is a huge win for horse racing, at the detriment of small business. 

Horse racing establishments are, under a law passed in 2021, allowed to operate historical horse racing (HHR) machines that are similar to skill games. That includes Churchill Downs, which announced in September 2021 it was opening a casino-style HHR betting facility in downtown Louisville.

Historical horse racing machines, or HHR machines, allow players to gamble on replays of horse races that have happened sometime in the past. According to the Courier-Journal, “some machines allow users to look at the horses’ odds and place specific types of wagers, while others are virtually indistinguishable from slot machines, allowing users to simply push a button every few seconds for each play.” 

They look and operate similarly to skill games, often referred to as “gray machines.” But unlike HHR machines, which carry little to no chance that a user could rely on skill to win the game, skill machines allow users to utilize memory and hand-eye coordination to win, rather than relying on chance alone. 

HHR operators bankrolled efforts to pass the skill game ban, which allows them to corner the market on slot-like gaming in Kentucky. 

That brings us back to the two legislative leaders, Osborne and Koch, who work in the very industry that stands to gain financially from the new law. Yet neither recused themselves from voting on, promoting or debating the bill. 

The Kentucky Legislative Ethics Commission provided two opinions to ABC affiliate WCPO 9 News that show lawmakers need not recuse themselves under such conditions. One of the rulings says abstention is required only when a potential benefit or detriment is particular to a legislator.

However, skill game proponents believe there is a significant appearance of impropriety, with the potential for legislators being unduly influenced by Churchill Downs and the horse racing industry. That raises the question of whether ethics rules need to be tightened to properly deal with similar incidents in the future.

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