By Christine Ficker
Thoroughbred racing in Kentucky is a major industry. In 2015 over 1,800 Thoroughbred races were conducted within the Commonwealth’s borders and those races accounted for over $100 million in purses.[i] Kentucky engages in the practice of “claiming races” as the majority of Thoroughbred races in the United States are claiming races.[ii] In a claiming race, each horse is subject to claim, or sale, at a value stated prior to the race.[iii] The advantage of this type of sale is that new owners are able to race the claimed horse almost immediately.[iv]
But, current regulations imposed by the Kentucky Horse Racing Commission prohibit a claimed horse purchased within the Commonwealth from racing elsewhere until the close of entries at the meet where the horse was claimed.[v] The purpose of the regulation is to prevent the purchase and movement of horses outside of the Commonwealth that would result in smaller race fields in Kentucky.[vi] Larger race fields ensure viability and integrity in Kentucky’s Thoroughbred industry.[vii] The movement restrictions are commonly referred to as “claiming jail.”
Recently, a California horse owner has challenged the “claiming jail” regulations alleging that they violate the Commerce Clause of the U.S. Constitution.[viii] The suit was filed in Franklin County Circuit Court and the court found that the Racing Commission’s regulations did not violate the Constitution. Following the appeal of the Circuit Court’s decision, both the Kentucky Court Appeals and the Supreme Court of Kentucky upheld the lower court’s decision.[ix]
The Supreme Court ultimately concluded that the “mere fact that [the claiming regulation] may have incidental effects outside Kentucky does not mean it is at odds with the Commerce Clause.”[x] The Court stated that Kentucky’s regulations were similar, if not identical, to the regulations in place in other states regulating the Thoroughbred racing industry.[xi] Additionally, the Court noted that individuals had the ability to choose whether to purchase horses using the regulated claiming practices or unregulated private sales.[xii]
In the unanimous decision handed down on May 5, 2016, the Justices concluded that the regulation was not an attempt by the Commonwealth to regulate horse racing or industry in other states, but was a measure taken to regulate the behaviors of those who participate in claiming races at Kentucky’s racetracks after they voluntarily subjected themselves in a manner that brought them under the Commonwealth’s power to license and regulate.[xiii] In the opinion, written by Justice Lisabeth T. Hughes, the Court concluded that the regulations help to protect Kentucky’s significant state interest in Thoroughbred racing which is one of the Commonwealth’s most important industries.[xiv]
The Supreme Court’s decision to uphold the Racing Commission’s regulations will help keep Kentucky in line with regulations used by other states in the Thoroughbred racing industry. The claiming regulations will also ensure that the Commonwealth’s racetracks will not be depleted by the purchase and movement of Thoroughbreds. Further, it ensures fields are filled with horses that are competitively equal. These competitive fields help preserve the integrity of the Thoroughbred racing industry both within and outside of Kentucky.
[i] The Jockey Club, 2016 Kentucky Fact Book A Statistical Guide to the Thoroughbred Industry in Kentucky, http://www.jockeyclub.com/factbook/StateFactBook/Kentucky.pdf (last visited June 7, 2016).
[ii] Thoroughbred Owners and Breeders Association, Claiming, https://www.toba.org/owner-education/claiming.aspx (last visited June 7, 2016).
[v] 810 KAR 1:015, § 1 (6).
[vi] Gregory A. Hall, Horse Claiming Rule Before Ky. Supreme Court, Courier-Journal, June 4, 2015, http://www.courier-journal.com/story/money/2015/06/04/horse-claiming-rule-ky-supreme-court/28473635/.
[vii] Hold Your Horses! State’s Claiming Race Regulation Upheld by Kentucky Supreme Court, http://www.skofirm.com/newsroom/2016/05/09/hold-your-horses-state%E2%80%99s-claiming-race-regulation-upheld-kentucky-supreme-court (last visited June 7, 2016).
[viii] Jamgotchian v. Ky. Horse Racing Comm’n, et al., No. 2014-SC-000108-DG, 1-2 (Ky. May 5, 2016).
[ix] Id. at 8, 11.
[x] Id. at 47.
[xi] Id. at 3-4.
[xii] Id. at 4.
[xiii] Id. at 47.
[xiv] Id. at 49.