Utah State Fair Ass'n v. Green

A Utah law known as the horse-racing act authorized pari-mutuel wagering on horse racing. The pari-mutuel wagering system allowed bettors to place straight, place, or show bets, which would result in payouts if the selected horse won, finished within the top two, or finished within the top three. As players placed their bets with the operator of the pari-mutuel machine, the bets were registered, and the players received tickets indicating their bets. Just before the race started, officials ceased all bets. From the pool of money wagered, the officials then deducted a commission of 10 percent. The bets were then computed to calculate the amount of money wagered for or against each horse to determine the betting odds for each outcome. The manner in which these computations were made necessarily resulted in a system in which players did not know the betting odds at the time that they placed their bets. The commissioners of the city of Salt Lake (the commissioners) (plaintiffs) filed an action against the Utah State Fair Association (defendant) challenging the validity of the horse-racing act under the Utah constitution, which provided that the state legislature shall not authorize any game of chance under any pretense or for any purpose. The trial court found that horse racing was not a game of chance and, therefore, was not prohibited under the Utah constitution. The commissioners argued that pari-mutuel wagering was a game of chance regardless of whether the underlying contest, horse racing, was predominantly determined by skill, because the productivity of the wager depended on the volume of bets placed by other bettors for or against that horse, and that factor was an element of chance.