PRESTONSBURG – As the new year begins, questions over the fate of the racing license owned by Appalachian Racing, and its proposed purchase by Keeneland, loom large over Floyd county’s financial future.
For two years Keeneland and Appalachian Racing have been negotiating the sale of the racing license of Thunder Ridge for a new race track and gambling parlor in Corbin. However in late November, the arrangement unexpectedly went sideways when Keeneland indicated a preference for a ninth license; a phantom license they were petitioning the Kentucky Horse Racing Commission to create.
In November of 2015 an injunction was filed on behalf of Appalachian Racing and the Floyd County Fiscal Court preventing the Kentucky Horse Racing Commission from taking up any action, specifically relating to the creation of that ninth racing license.
According to Floyd County Judge Ben Hale, Keeneland tried to circumvent its intention to buy the racing license of Appalachian Racing, owners of Thunder Ridge in Floyd County, by seeking the creation of a new license from the Kentucky Racing Commission.
“It was the impression that was told to us, Keeneland had indicated to us, at different times, even during the previous administration that they were going to buy the Appalachian Racing license,” said Hale.
Historically Kentucky has held eight racing licenses with those licenses often being moved, or transferred.
“The importance to us was, this court, that 20 some years ago the Floyd fiscal court, let bonds to about $2.7 million, basically to make that deal work over there. We still owe about 2.2 million on that property,” said County Attorney Keith Bartley adding that the owner of Appalachian Racing (ARI) had agreed to pay off that bond with the proceeds of the sale of the license. “So it was important to us for that to go through.”
Bartley argued that it is incumbent upon the racing commission to consider the negative financial impact on Floyd County.
The issue is also playing out in Frankfort with lines being drawn in the state house and senate.
On November 20, House Speaker Greg Stumbo (Dem. – Prestonsburg) pre-filed legislation for the 2016 General Assembly which would prohibit a track from having more than one license. The bill states that a license could be transferred as long as all of the assets and liabilities of the current licensee transfer as well.
Senate President Robert Stivers (Rep. – Manchester), a supporter of the new license, told the Herald-Leader in November he was informed by Keeneland “a few months ago” that they would seek a new license rather than buy the license owned by Appalachian Racing. The new Corbin quarter horse racetrack is to be located in Stivers district.
In a December story in The News Journal, it was stated that Keeneland decided to back out of the proposed racing license purchase because of a name change. In that report, Corbin’s Economic Development Director Bruce Carpenter described the path to a ninth license as a “better and cleaner” option.
Hale said he couldn’t speak for ARI, “but I couldn’t care less what they call it, so long as they buy ARI’s license.”
Bartley says that such remarks indicate Keeneland was never negotiating in good faith.
“It became clear here at the end that Keeneland actually was probably just playing games with Appalachian Racing, just keeping them from talking to other potential buyers,” said Bartley.
Bartley says that the agreement between Appalachian Racing and Keeneland included a two year exclusivity clause which prevented ARI from even discussing the matter with anyone.
“For two years you can’t tell nobody else that your thinking about selling,” said Bartley. “You know, lock them up for two years. All along it appears they were working behind the scenes with the Kentucky Horse Racing Commission to develop a ninth license, and issue it to them, so that they wouldn’t have to pay Appalachian Racing for it.”
Now as the Governor Matt Bevin’s administration takes over in Frankfort, these questions could be answered by a wholly new racing commission. In fact, former chairman Bob Beck announced his retirement on December 7, which was Governor Beshear’s last day in office.
Hale says that he hopes that a cooling off period will “let the swelling go down,” that all the parties will come back to the table and that Keeneland will honor their original agreement.
The next hearing on the matter is scheduled for January 12.
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