May 9, 2016

Hold Your Horses! State’s Claiming Race Regulation Upheld by Kentucky Supreme Court

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Steven B. Loy
Member, Stoll Keenon Ogden PLLC

A sweeping decision by the Kentucky Supreme Court upholds the Kentucky Horse Racing Commission’s restrictions on the claiming process, ensuring the integrity and viability of Kentucky’s signature Thoroughbred industry.

The court’s unanimous decision on May 5 ended a lawsuit filed by California horse owner Jerry Jamgotchian against the Kentucky Horse Racing Commission, alleging Kentucky’s regulation violates the U.S. Constitution’s Commerce Clause.

Kentucky’s rule requires that a Thoroughbred purchased in the Commonwealth as a “claimed horse” is prohibited from racing at another racetrack until the meet has ended at the track where the horse was purchased.

According to the Thoroughbred Owners and Breeders Association, a majority of Thoroughbred races at Kentucky racetracks, as well as in other states, are claiming races. Each horse entered in a claiming race is subject to sale, or claim, at the value stated in the conditions of the race.

The Kentucky Supreme Court’s opinion states, “We are convinced that the challenged Kentucky regulations – regulations similar (often identical) to regulations in effect in the large majority of states that allow wagering on Thoroughbred horse races – do not conflict with the federal Constitution’s insistence on an interstate commerce unburdened by state-erected barriers against that commerce.”

The ruling is important because it keeps Kentucky’s Thoroughbred racing industry in step with other states, according to Steven Loy, an attorney with Stoll Keenon Ogden PLLC who argued the case on behalf of the Kentucky Horse Racing Commission.

“The intent of the rule is to calibrate competition, providing an incentive to have competitively equal horses in races,” Loy said. “It also ensures legitimate purchases are made only by licensed owners.”

The Kentucky Horse Racing Commission was represented by its general counsel, Susan Speckert, along with Robert Watt III, Anthony Phelps, Monica Braun and Loy of Stoll Keenon Ogden.

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