Wyoming’s "instant racing" industry reportedly recovering

Historic horse race betting, also known as “instant racing,” is a fairly recent phenomenon employed in just three states: Wyoming, Arkansas and Kentucky. It works by letting players use an electronic machine to bet on the winners of more than 100,000 historic horse races, though the locations, dates and names of the horses are omitted.

Wyoming’s first such machines were installed in 2003, only to be removed three years later following a court’s finding that the machines were illegal. In its 2006 opinion, the Wyoming Supreme Court referred to the historic race machines as “a slot machine that attempts to mimic traditional pari-mutuel wagering.”

Then, in 2013, the Wyoming Legislature approved a bill that allowed the machines to return, provided they “afford an opportunity for the exercise of skill or judgment, where the outcome is not completely controlled by chance alone.”

For a time, the machines gained a following in Cheyenne and elsewhere, under the purview of two authorized machine operators, Wyoming Downs LLC and Wyoming Horse Racing LLC.

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But late last year, everything changed following an opinion from Wyoming Attorney General Peter Michael

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He said the historic horse race machines violated Wyoming’s law that prohibits gambling due to a “bonus round” feature machines used that was based on pure chance, rather than informed wagering.

In October 2015, the Wyoming Pari-Mutuel Commission, which oversees and regulates horse racing and associated wagering in the state, issued an order that required all historic horse racing outlets to shut down their machines until they could be reprogrammed to cut out any elements of blind luck.

By February of this year, both companies had done as ordered, but their player base was left decimated after each company spent months out of commission. Even after the reprogrammed machines were online, some players found them less exciting than before, and revenues dwindled.

At one point, Wyoming Downs chief operating officer Rick Cook said his company had to close half of its eight statewide locations and reduce hours at the remainder, including its Cheyenne venue at 3617 E. Lincolnway.

Since then, however, both companies have been slowly regrowing their player base and rebuilding their revenues – some of which are, in turn, contributed to local city and county governments. The decline and rebuilding is evident, for example, in the semi-annual disbursements pari-mutuel companies have been paying to Cheyenne city coffers.

In an email Wednesday, city treasurer Lois Huff said pari-mutuel payouts to Cheyenne started slow, amounting to just $1,042 in October 2014. By February 2015, that had grown to $61,153, and then doubled to $146,801 in the next payment made in August 2015.

Then came the shutdown, the reorganization and the player exodus, which resulted in $93,546 disbursed to the city in February 2016.

The most recent payment of $119,279 made Aug. 15 shows the gradual recovery.

“It’s steadily improving,” Cook said Wednesday.

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Our business is growing each month, but our volumes are still currently about 40 percent of what they used to be

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Wyoming Downs closed four of its sites in April, but Cook said those sites have been able to reopen, albeit with fewer staff. The company has also signed on with a new game developer, and in August deployed new software designed to improve payouts and reintroduce bonus round features, but without the chance element.

“These bonus rounds are decided 100 percent by a horse race that ran sometime in the past, a pari-mutuel event,” Cook said. “There’s nothing random about the outcome of the bonus rounds now. It’s a matter of tweaking our software to where the paybacks are spread out so the players can sit down and play the game for an extended period of time without losing a lot of money on it.”

Eugene Joyce of Wyoming Horse Racing said his company never had to close any of its six locations in the state – including at 1802 Dell Range Blvd. in Cheyenne – but it, too, has been working to rebuild.

“I’d say the overall market for both operators combined is about 70 percent what it was when we closed down in October of last year,” Joyce said. “But we’re building the customer base back up, which is good news, and customers are responding to the new product.”

Both operators say they’ve enjoyed a good working relationship with the Pari-Mutuel Commission since getting back on track this year. In fact, the commission has called a special meeting for 9:30 a.m. Tuesday to consider requests for software tweaks, new games, terminal transfers and game theme changes for both companies as they continue to try to find players’ sweet spot.

“The commission has been very cooperative, and they understand our urgency to get things modified and approved, and they’ve been working very well with us,” Cook said. “We know who our players are, and when we think the time is appropriate, we’ll contact them to say, ‘Come on back in, we think we’ve got a product you’ll enjoy.’”

Joyce said he agrees historic horse racing’s best days in Wyoming are still ahead of it, and that the industry itself is still very much in its infancy.

“The hope is to expand our locations so we have a footprint in all 14 counties (that have formally approved pari-mutuel operations within their borders), and we can contribute to those counties by generating new revenue streams for them to utilize as they see fit,” Joyce said.