Kentucky Downs was founded in 1990 as Dueling Grounds Race Course and conducted only steeplechase races in its first year. The next year, the fences were removed and the track switched to flat racing. In 1997, Turfway Park acquired Dueling Grounds in partnership with other Thoroughbred entities. When Keeneland purchased Turfway Park in 1998, Keeneland also acquired a minor ownership in the track as part of the transaction.
The name Dueling Grounds came from the history of the Samford Duncan farm, where the track was located. The farm, located in a slight corner of what is otherwise a perfectly straight Kentucky-Tennessee border, was the site of numerous duels in the 1800s. At the time, dueling was illegal in Tennessee but not in Kentucky. Sam Houston took part in a duel on the site. Dueling ended in 1827.
Kentucky Downs hosts a limited live racing meet each year that features the Kentucky Cup Turf Festival.