Rules & regulation · 5 min read
What a racino is, and why it exists
Racetracks with slot machines became one of the most common casino formats in North America. The reason is legislative, not commercial.
A racino is a racetrack licensed to operate gaming machines, and in some jurisdictions table games as well. The word is a portmanteau that began as industry shorthand in the 1990s and is now used in legislation. Racinos exist because of a specific political problem, and understanding that problem explains almost everything about how they look and feel.
The legislative origin
Horse racing declined steeply across North America from the 1970s, as television, lotteries and other forms of betting took its audience. Tracks employed large numbers of people in rural constituencies — trainers, grooms, farriers, feed merchants, veterinarians — and their closure was politically costly. At the same time, state legislatures were looking for revenue without raising taxes.
The racino was the compromise. A legislature could authorise slot machines at existing racetracks rather than license new casinos, which was easier to pass for three reasons: the venues already held gambling licences, the sites were already zoned and built, and a share of machine revenue could be written into the statute as purse support for the racing industry. Pennsylvania, New York, Ohio, Ontario and a dozen other jurisdictions followed this route.
What that produces on the ground
- A gaming floor grafted onto a grandstand. Many racinos occupy a new building beside the track, or a converted grandstand level, and the two operations often have separate entrances.
- Machines first, tables later or never. Most racinos were authorised for slots alone, with table games added years afterwards by separate legislation. Some never received them.
- Large car parks and no hotel. The business is built on frequent short local visits, so the capital went into parking and food outlets rather than rooms.
- Statutory revenue splits. A fixed percentage of machine revenue goes to racing purses, breeding funds and the state, which is why racino tax rates are often far above commercial casino rates.
- Racing that continues regardless of demand. Where purse support is a licence condition, the track must run a minimum number of race days whether or not anyone attends.
The decoupling argument
The arrangement has come under pressure from both sides. Operators argue that they are required to subsidise a sport their customers do not watch, and have lobbied for "decoupling" — permission to keep the gaming licence without running races. Racing interests argue that the machines were authorised specifically to support the industry, and that removing the obligation breaks the bargain on which the licence was granted. Florida decoupled its pari-mutuel requirements in 2021; several other jurisdictions have debated it without resolution.
Where racinos sit among the other formats
| Format | Typical licence basis | What it usually means for visitors |
|---|---|---|
| Racino | Existing racetrack permit extended to machines | Slot-heavy floor, limited tables, no hotel, high tax rate |
| Commercial casino | Purpose-built licence from a state or national regulator | Full table range, often with hotel and entertainment |
| Tribal casino (US) | Tribal-state compact under IGRA | Game mix set by compact; can be very large |
| Riverboat / dockside | Historic requirement to gamble on water | Floors on vessels or moored structures; many now effectively land-based |
| Card room | Card-game-only licence | Poker and player-banked games; no slot machines |
Beyond North America
The format is less common elsewhere because few countries tie gambling licences to racetracks. Britain keeps the two sectors separate: betting shops and on-course bookmakers handle racing, while casinos are licensed under their own class system. Australia licenses pokies in pubs and clubs rather than at tracks. The nearest European equivalents are the French and Italian casinos that sit beside racecourses for historical reasons rather than as a legislative package.
Questions
Is a racino a real casino?
Legally it is a distinct licence class in most jurisdictions, but on the floor the difference is often invisible. The clearest tell is the game mix: a slot-dominated floor with few or no dice and wheel games usually indicates a racino licence that was never extended to full table gaming.
Do I have to bet on the races?
No. The two operations are separate, and at most racinos the majority of visitors never go near the track.
Why are racino taxes so high?
Because the statute that authorised the machines also allocated the revenue in advance — to the state, to racing purses and to breeding funds. Commercial casino licences were generally negotiated with capital investment commitments instead.
Are racinos better value for players?
Not usually. High statutory tax rates leave less room in the margin, so machine returns at racinos tend to sit at the lower end of the range, and table minimums are not meaningfully cheaper than at regional commercial casinos.
More on rules & regulation
Last reviewed 1 January 1970. This page explains how something works; it is not legal advice and not a recommendation to gamble.