Is That A Horse Race Or A Slot Machine? Depends On Who You Ask

Oct 16, 2015

People watch the horses race at Central Wyoming Fairgrounds in Casper, Wyoming.
Credit Miles Bryan

Historical horse racing machines will remain shut down in Wyoming for at least weeks, and more likely a few months.

Since the machines were legalized in Wyoming in 2013, they’ve brought in tens of millions in revenue for the horse racing industry—and generated millions in taxes for the state. Historical horse racing machines currently exist at more than a dozen locations throughout the state.

But a September 23 Wyoming Attorney General’s report found that the “bonus rounds” on most of the machines relied on chance, not skill, to produce an outcome,  and therefore, were in violation of the 2013 law that legalized historical horse racing in the state.

On October 8, the Wyoming Pari-Mutuel Commission, which regulates state gaming, issued an order suspending all historical horse racing machine operations until they could be brought into compliance with the Attorney General’s report.

At a special meeting this morning the committee heard from Race Tech, the vendor who wrote the software for these machines. A company spokesperson said it will need between 12 and 15 weeks to write a software update.

Jockey's urge their horses along at the Central Wyoming Fairgrounds in Casper.
Credit Miles Bryan

"It’s going to be really tough,"said Wyoming Horse Racing LLC President Eugene Joyce, who runs live horse races and operates historical horse racing machines in the state. "For all of our stakeholders: my employees, the cities and counties, the horsemen. We all take a financial hit. I don’t know any business that can stop operating [for 12-15 weeks] and still survive."

Wyoming Pari-Mutuel Commission Executive Director Charles Moore said that the Commission had no choice but to suspend the machines after the state Attorney General released his report, but he doesn’t expect historic horse racing to go away in the state forever. "We are all looking at this as a long-term situation," he said. "And hopefully, with the permits moving swiftly to rectify the concerns and problems we see we can get this back on track."

But historical horse racing machines were controversial long before these most recent developments.

Adela Paiz plays the games at Wyoming Downs.
Credit Miles Bryan

Before historical horse racing machines were suspended in the state the Wyoming Downs racing parlor in Laramie was a popular place to be. Lu Schellhaas is a regular there when I visit  she’s on a hot streak: up to $750 from a $10 bet.

"So this is when I should go home," she said. "But no, I am going to hit the button again!" 

Schellhaas is playing Wyoming Downs' most popular attraction: a historical horse racing machine. These games have the lights and sounds of a classic casino-style slot machine. But while slots determine whether you win at random, historical racing machines are tied to the outcome of a past horse race. Before you hit the big bet button, you're shown a display of horse racing stats, and you’re supposed to use those stats to pick your three cherries, or dancing cowboys, or whatever variables the machine uses.

When Wyoming’s legislators approved historical horse racing in 2013 they did on the basis that it was a game of skill. Slots are considered a game of chance. So, you might think it’s safe to assume a winning player like Schellhaas knows a bit about horse racing, right? Well, not really.

"I don’t know a thing,” Schellhaas said after another high-yield push of the button. "You don’t really need to." 

People playing historical horse racing machines at Wyoming Downs in Laramie, Wyoming.
Credit Miles Bryan

The games at Wyoming Downs offer an experience similar to playing slots at one of Wyoming’s Native American-run casinos, but without the long drive. Right now, historical horse racing machines are legal in Oregon, Arkansas, and Kentucky, and are being debated in Texas. They are technically still legal here in Wyoming too but are suspended until their software can be changed. These are states where traditional slot machines are restricted to Native American casinos or where they're banned entirely. But even though the players might not care much for actual horse racing, the horse racing industry cares a lot about these players.

There were 32 days of live horse racing in Wyoming this year, up from four race days before historical horse racing machines were legalized in 2013.

"There would be no live horse racing in Wyoming if not for historical horse racing," said Eugene Joyce, who puts on live horse races and also operates historical horse racing machines in the state.

In Wyoming, and in most of the other states with historical horse racing machines, only companies that put on live horse racing are allowed to run historical horse racing machines. Joyce said his company, Wyoming Horse Racing LLC, is projected to bring in about $11 million this year, and 91 percent of that gross revenue will come from historical horse racing machines. About a quarter of that is paid in taxes. Joyce says he uses much of the profit he makes from the machines to fund live horse races, which he says is otherwise a money-losing operation. He says the electronic games are just a way to bring the thrill of live horse racing to a wider audience.

"Make no mistake, it is 100 percent horse racing, but it's packaged in a way to appeal to a new customer base," he said.

But when the people who run Wyoming’s only legal traditional slot machines look at places like Wyoming Downs, they don’t see horse racing.

"If it walks like a duck, quacks like a duck, it's a duck," said Wind River Casino CEO James Conrad. "The bottom line is that these are slot machines." 

The casino sits on Wyoming’s Wind River Indian Reservation, and Conrad said more business at places like Wyoming Downs means less business at the reservation casinos. Idaho lawmakers legalized historical horse racing machines two years ago, but recently banned them after a coalition of state tribes raised objections. Conrad said his casino is the largest employer on the reservation.

" We have 800 employees. Ninety percent are Native American," he said. "And if we have slot machines everywhere [in the state], it will affect the number of employees we have."