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Kart races start at the carnival near the freakshow. Completing one Kart race unlocks Crash helmet used for the scooter. You have to come first in all five of the carnival Kart Races to then unlock the street kart races. There are three street races and after you've completed these you will unlock the Go-Kart which is located near the bike garage near school. You are only able to complete the 3rd Street Go-Kart race in Chapter 5.