A new Kentucky committee will examine the pari-mutuel wagering tax and legislators will debate whether or not it is too low.
A New Committee in Kentucky to Examine Pari-Mutuel Tax
A committee established this year will focus on the examination of pari-mutuel wagering tax in Kentucky. The committee’s co-chairs are state Rep. Adam Koenig and Kentucky Senate majority floor leader Damon Thayer.
Koenig chairs the House Committee on Licensing, Occupations, and Administrative Regulations, dealing with racing matters. Thayer worked for the Breeders’ Cup and the National Thoroughbred Racing Association.
The General Assembly passed the measure, allowing the Kentucky Horse Racing Commission to approve and regulate historical horse racing (HHR).
The machines for historical horse racing look a lot like slot machines, but instead of random number generators, they use races that have already happened to wager and win.
The tax rate on the machines was the subject of the debate on the legislation. There were questions regarding the tax rate on the machine slots. The state’s general fund receives 1.5% of the handle, which is the total money from wagering, after subtracting funding for thoroughbred and standard-bred horse breeding development.
The Kentucky Equine Education Project, which promotes the horse industry, stated that it would work with the committee to ensure a fair tax structure for the industry and the state. Currently, the industry provides 60,000 jobs in Kentucky.
The Kentucky bill supporting historical horse racing passed the Senate in February this year with a 22-15 vote. After that, it moved to the House of Representatives, which then passed it with a 55-38 vote and sent it for signature to Gov. Andy Beshear, who strongly supports historical horse racing.
Critics Consider the Tax “Egregiously” Low
The measure was not without criticism. Some said that the state would not receive enough revenue from the machines for letting tracks offer them in their venues.
According to official data from the Kentucky Horse Racing Commission, HHR generated $531.8 million in total handle from parlors in Kentucky in April. Tracks received $46.1 million from this amount and the general fund – $3.7 million, which amounts to 8% of the track’s revenue. With the breeding development funds of $4.3 million, it goes up to 17.3%.
Jason Bailey, the executive director for the Kentucky Center for Economic Policy, wrote that he hopes that lawmakers raise the tax. He said it is “egregiously” low.
Republicans hold 8 of the 10 seats in the committee. The other members are state Sens. Julie Raque Adams, R-Louisville; Denise Harper Angel, D-Louisville; Christian McDaniel, R-Taylor Mill; and Stephen West, R-Paris, and others.