Kentucky House of Representatives Bill 607, which contains a provision that greatly benefits equestrians by effectively eliminating fracturing, was passed by a Kentucky House of Representatives committee on Wednesday morning. HB 607 also standardizes tax rates for all pari-mutuel bets placed in Kentucky and also makes claim races eligible for the Kentucky wallet subsidy. The bill still has to be passed by the House of Representatives before it is sent to the Senate.
Representative Adam Koenig, whose county is in Northern Kentucky near Turfway Park, is a major sponsor of the bill, which has the potential to significantly increase revenue for the state General Fund while allowing horse racing to thrive.
“In a couple of years, we’re looking at an increase of $27 million, maybe a minimum,” Koenig told the committee, noting that is in addition to the $62 million expected to flow in. state from pari-mutuel tax in 2022 “So the money is coming from industry. I think I found some creative ways to make more money without hurting the product. ”
The bill is the product of last year’s legislative interim task force on pari-mutuel betting chaired by Koenig and Kentucky Senate Majority Leader Damon Thayer, a longtime supporter of Kentucky’s racing industry. . Created after the passage of legislation protecting Historic Horse Racing (HHR) in the state, the task force was tasked with identifying ways to increase state revenue without negatively impacting the budget. and does not prevent racecourses from investing in HHR activities and related capital projects.
Penny Breakage A positive development…
An important element of the HB 607 is the virtual elimination of the so-called break, which tracks winning bonuses round to the nearest coin based on a $1 bet. Under HB 607, tracks will be required to be paid to the nearest penny, resulting in larger amounts being returned to the horsemen. Koenig cites the example of a Triple Crown winner in 2018 Evenly pay $7.80 to win the GI Kentucky Derby, a number that could be $7.92 in cents.
“It’s the bettors’ money,” Koenig said. “I have been very concerned since last year’s HHR debate about making sure bettors are interested. We took care of everyone else. Everyone gets healthy about this except the bettors, and this is how we will help the bettors. They will be paid every cent instead of every 20 cents. In addition to interest bettors, it will make Kentucky the place to bet in North America. If you are a big money bettor, why would you bet anywhere else? ” (Click this to see Adam Koenig on a recent episode of the podcast TDN Writers ‘Room).
Also easily passed the “L&O” committee on Wednesday were bills that would legalize betting on sports in Kentucky and provide gambling funding.
In addition, HB 607 calls for a tax on pari-mutuel betting at 1.5%, the same rate assessed for the HHR game. The bill increases the current rate for bets placed via ADW from 0.5%. Tax rate on simulcast bets placed on the Kentucky track in out-of-state racing will be reduced from 3%. The vast majority of bets are now placed through ADW, while the simulation feature has been significantly curtailed by horse riders for the convenience of online betting.
KTDF supplements have been expanded…
Currently, money from the Kentucky Thoroughbred Development Fund (KTDF) is restricted to unclaimed races, but HB 607 has revoked that provision, a policy change that has been strongly supported by Kentucky HBPA in an effort to raise the wallet for the lower level races in which many riders compete.
Congressman Al Gentry, a member of the pari-mutuel betting task force, called employment for races qualifying for KTDF supplements “very, very important and one of the most important” important parts of the bill”.
Given that HHR has placed Kentucky in a position to offer some of the highest wallets in the world, and with HHR revenue expected to grow with the expansion of satellite facilities, HB 607 also stipulates that after funds KTDF’s $40 million and Kentucky Standardbred Development Fund $20 million in one year, the wallet-to-wallet rate will go down, with the difference going into the state’s General fund.
“We believe in two or three years, as the historic Racecourse facilities are more complete, that we are looking at adding $20 million to the General Fund,” Koenig told the committee. “Increasing the ADW tax from half to 1/2% would immediately generate $4 million a year. It’s a growth area, so that will continue to go up over time. ”
Chair @repkoenig spoke to the press after the Commission’s successful votes included a pari-mutuel tax and disruptive reform. pic.twitter.com/hACv8RpbrW
– Pat Cummings (@PatCummingsTIF) March 16, 2022
Invoices also include:
- Provides funding for equine programs at the University of Kentucky and Bluegrass Community and Technical College. The University of Louisville business school’s Equatorial Industry Program received funding from pari-mutuel staking.
- Eliminate the 15% per-person admission tax that tracks now pay even if they don’t charge entry (that’s every track except Churchill Downs and Keeneland).
- Require racetracks to maintain “self-exclusion” lists – where individuals such as problem gamblers can state that they do not wish to be allowed access to a track or HHR facility for a period of time certain – to be shared with the racing committee and other tracks and HHR properties.
