It’s been nowhere but up for Kentucky Downs over the past decade. The first track in Kentucky to install historical horse racing machines, in 2011, Kentucky Downs has gone from being a border-town curiosity to a powerhouse on the Kentucky racing circuit. This year, an estimated $2 billion will be bet at its two casinos near the Tennessee border. From that, approximately $15 million will be sent into the Kentucky Thoroughbred Development Fund, while Kentucky Downs itself will retain nearly $150 million in net commissions. The track has used some of that money to fund the biggest purses in racing – this year, $24 million will be available to horsemen over seven days of racing (though the KTDF monies are only available for registered Kentucky-bred horses). Fans can expect big fields once again, as horsemen from near and far chase purses that aren’t seen anywhere other than the Breeders’ Cup card. Purses for the track’s 17 stakes races will total $14 million – and not a single one of those stakes is a Grade 1. With full fields and low takeouts, simulcast players have flocked to the track’s racing signal. Last year, $80.2 million was bet on 73 races, a fivefold increase over the $15.9 million bet on the track’s races in 2014. Part of the reason was the track’s historically low takeout rates – 14 percent for straight wagers, and 19 percent or less for exotics. Those rates will change this year, with the track bumping up each pool by 1 point, a decision that has set off grumbling from horseplayers around the United States. Although the live-racing numbers are big, the track is still something of a curiosity. All of the races will will be run over an undulating turf course shaped like a kidney, there’s still no grandstand, and the vast majority of the track’s on-site customers will merely pull up a truck to the outer rail and pop open the tailgate. Ted Nicholson, the track’s vice president of racing, recently sat down for an interview with Daily Racing Form. He talked about Kentucky Downs’s contributions to other tracks on the Kentucky circuit, its plans for the future, and why the track raised its takeout rates. The interview has been edited for clarity and length. Kentucky Downs is a unique track. Nearly all of the purses are generated by the casino and year-round simulcasting, you only run seven days, and all of your races are on the turf. What do you see as the role of Kentucky Downs, both in Kentucky and within the larger U.S. racing world? Our role, at least in the 8 1/2 years that I have been here, is to work with the Kentucky HBPA and the KTDF to bolster the purses not only at Kentucky Downs, but also around the state. Even if you go way back, to 2014, we were starting to offer purses that were making people pick their heads up. But since then we have been able to spread some of that purse money around to the other tracks in the state. Over the course of the last seven years, I believe we have sent over $35 million of [KTDF] purse money [to Ellis, Keeneland, and Churchill]. Last year, we sent Keeneland $5 million total for their two meets, and we will be sending them another $5 million this year. So overall, in the state, we can be proud of the fact that what we’ve been able to accomplish has tremendously helped the overall industry throughout the state of Kentucky. When you look at it as a whole, in relation to the rest of the country, other trainers, whether they are in Florida or California or New York or some of the smaller markets, they have had to watch as our purse structure has gone up considerably. Five years ago, I think Kentucky was third, behind New York and California. Now, we’re first. So now we’re attracting that national attention. :: Download a free copy of Daily Racing Form's 2023 Kentucky Downs Player's Guide With a lot of the purses being KTDF funds, not everyone is eligible for all of the purse money. Is there a way for Kentucky Downs to be more relevant to those non-KTDF horses? You’ll see that, actually, this year. We’re running 11 races this year that will have a purse of $1 million or more. The Dueling Grounds Derby was a race that in previous years may have been $500,000 or $600,000, and that money was split maybe 50-50. Now it’s a million-dollar race, but it’s still $600,000 to any breed, while it’s $1 million to a Kentucky-bred. If you’re a Virginia-bred or a New York-bred or Florida-bred, you’re running for $600,000 in a 1 5/16-mile turf race for 3-year-olds. That’s pretty strong. You are not going to find that race for a non-Kentucky-bred in too many places. And I think the foreign market is going to start paying attention to our races too. Because, you know, $600,000, that’s hard to turn your back on. You’ve had these purses soar to astronomical levels, so why not think about adding race days, either to the existing seven-day fall meet or creating a new meet in the spring? We’ve talked about it. I could maybe add one more additional day on to our fall meet now. That’s been considered. It would just take a lot of planning and thought. And then you have to fold in the weather too. So we could maybe, down the road, get to eight. As far as running later in the fall, the turf course takes quite a beating over the course of our seven days. We run over three lanes, but when you run 70 to 75 races over a turf course over a short amount of time, it’s just not wise to try to run back on that course anytime after the meet is over, not when we have to put the course to bed, so to speak. It’s what we do to get it ready for the winter. As far as spring, there’s no real openings on the Kentucky calendar for us to jump in. Keeneland has April, and Churchill has May. There isn’t a period of time where I could jump in there and run three or four days. Has there been any thought to adding a dirt track? We kicked that one around quite a while ago. Because of the undulation of the turf course, it might be difficult. I’d have to get some expert in here. I don’t know. It’s not likely. In 2017, over five days of racing, you had total handle of $30.2 million. Last year, you had handle over seven days of $80.2 million. What’s led to that growth? It’s a couple of things. One of the bigger things is the positioning of our races. I think it’s a lost art in this industry of setting your races apart from other tracks. I made a concerted effort to make sure our post times were not sitting on top of Saratoga. In 2016, we were running races within four or five minutes of Saratoga. If you are running races right on top of it, or near it, you’re not going to get any attention. So we wait to see what Saratoga’s schedule is going to be, and we work around it. Then we have to do the same for Del Mar when we’re going against them. That’s one factor that’s really accelerated the growth. And the other is the increased purse structure. The better the purses, the better the horses, the better the jocks. So then you have your customers around the country, they’re asking, ‘Where’s so and so? Oh, he’s at Kentucky Downs.’ So they take a look. And you have a lot of people who like betting grass races and like betting full fields, and they become a fan of the product because of what we have been doing. It’s just been building every year, it improves every year, an increase every single year since 2016. :: Bet the races with a $250 First Deposit Match + $10 Free Bet and FREE Formulator PPs! Join DRF Bets. One of the things that had definitely attracted people was your historically low takeout rates. Yet this year you raised all the rates across the board by 1 point. It’s caused an uproar. What was behind that decision? Obviously, it was not an easy decision to make. Like every other business in this country right now, we are experiencing extremely high expenses, whether it’s fuel, whether it’s all the temporary things I have to rent or to get employees. The expenses are skyrocketing. People don’t realize that I have to bring about 60 [operations] people to come here to be here for only three weeks. Then you fold in a $650,000 bill from [the Horseracing Integrity and Safety Authority], and it made it a little bit of an easier decision to raise the takeout. Now we did that knowing that at an 18.2 blended rate, we are still 1 point lower than Keeneland and 2 points less than all the big tracks, whether it’s California or New York or Churchill. We’re still below them. There’s been a lot of speculation that the reason for the rate hike was the need to get higher rebates to the computer teams. Did you need additional room to get computer players into the pools? I can tell you unequivocally that that never entered the discussion. It had nothing to do with it. I’m not privy to what the ADWs do with their customers, but that’s just not true. Did you raise your host fee as well? Yes. We raised it by the same 1 point, across the board, over time. (Editor’s Note: Rebates are awarded by account-wagering companies or other entities serving computer teams using the difference between the host fee – the amount the entity pays to the racetrack providing the signal – and the takeout, typically called the “spread.” If the host fee rises at the same rate as the takeout, the spread remains the same, so rebates can’t be raised without the betting entity losing revenue.) Do you currently have CRWs in your pools? Yes, we believe there are. You talked earlier about not having a grandstand. You’ve built a new hotel at the site, near the casino, and you’ve built an entirely new casino at a location about 30 miles away. Have you thought about adding any new ontrack amenities to the racing operation? We try to do at least one or two things for the general public a year. So there’s the new hotel next to the casino, which is finally done, and there’s a new pool area out back, where you can walk maybe 70 feet and watch the race live. And because of the new hotel we were able to construct a new camera location. The last few years we have had scissor-lifts with a camera on it to try to get a clear view of the backstretch, where they go up the hill and then down the hill, so we have a new camera position on top of the hotel which is really going to change that. That’s something we get a lot of complaints about, from our simulcast customers. . . . And we have a new camera [on the far turn] that can be manipulated from the TV truck so people can actually see who is coming up on the outside. That’s going to be a nice thing for anyone who likes betting on our races. But this year we focused on doing some things to make our horsemen happy. What I’ve noticed over the last few years is that when the horsemen leave the paddock they walk straight out and walk on to the apron, and they have to strain their necks to watch their horses come down the stretch. So it’s very difficult for them to see their horses unless they are watching the big screen in the infield. So what we did this year is build a two-story viewing deck that, as soon as you leave the paddock, you can walk right up the steps, and you will have the same view as our stewards, or Larry Collmus, our announcer. So I really think that improvement is going to make a lot of horsemen happy. The other thing we have done for the horsemen the last two or three years is that if you have a horse in on a particular day, the owner receives seating and food and beverage comped. It doesn’t matter if it’s a maiden race or a stakes race. We’re always trying to do things to improve things for the real stars of this game, which are the owners, trainers, breeders, and horsemen. Those are the people we really try to take care of. A lot of the people who come to the races, it’s more of a country fair. It’s free to get in. They bring their chairs and their umbrellas, and they sit in the tailgate area and have a great time. But the superstars, those are the horsemen. You talk about your commitment to the horsemen, who race for these enormous purses, and all the amenities available to them. You also talked about the HISA bill and how that factored into the decision to raise the takeout rate. Was there any consideration of going to the horsemen and saying that they might need to give up a point or two of their share of the takeout to cover that bill, so you didn’t have to raise takeout? That is part of the discussion going forward with the HBPA. But I don’t have anything more to say on than that right now. We are talking to the HBPA about HISA. So where do you see Kentucky Downs in five years? I think it’s going to be more of the same. We’re going to continue to improve. Now that we have a beautiful hotel at the eighth pole, we’re going to try to do some things to integrate the hotel and racing, do some things back-and-forth. We won’t be building a grandstand, but I really think we will be trying to do things to bring on board more amenities that will enhance our overall product, whether it’s ontrack or not. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.