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Kentucky Downs was opened in 1990 under the name Dueling Grounds. Situated on 300 acres in Franklin, Kentucky, Dueling Grounds cost $12 million to construct. Amenities for opening day included the two-storey colonial-style clubhouse, complete with the Sly Fox Restaurant, 250 televisions, six concession areas and 250 reserved bleacher seats at the finish line.
In 1996, Dueling Grounds ran into financial trouble as the track did not make enough money to pay its purses for the year's meet. The license of the track was revoked and dates for meets were denied for 1997. The track went up for auction and was purchased for $11 million when Churchill Downs and Turfway Park teamed with three other investors. Turfway Park took control of the day-to-day operations. The owners renamed the track Kentucky Downs in an effort to rid it of its poor images.
In 1998, things turned around as Kentucky Downs announced the Kentucky Cup Festival and in its inaugural meet posted a record handle of $6,455,227. The next year saw another record meet, posting another record handle of $8.3 million.