The Kentucky State Senate passed HB 607 on Tuesday, a bill that simplifies the various taxes on horse racing bets but leaves historic horse racing alone.
Senator Damon Thayer, who co-chaired with Rep. Adam Koenig the task force that led to the creation of HB 607, told the Senate on Tuesday of the bill: “I think it puts us on a path to being the most lucrative racetrack for year-round in North America within the next 18 to 24 months.”
HB 607 requires pari-mutuel betting to be taxed at 1.5 percent. That’s the same rate currently assessed for HHR games. However, the bill raises the current rate for wagers placed through online platforms (or early deposit wagers, commonly known as ADW) from 0.5 percent. The tax rate on simulcast wagers placed on a Kentucky track in an out-of-state race would be reduced from 3 percent. Most betting is now done via ADW, while simulcasting has been greatly reduced as horse players opt for the convenience of betting online.
Koenig has received national attention and praise from horseplayer advocates for being a champion of the virtual elimination of breaks. That’s where he tracks the round winning payouts to the nearest dime based on a $1 bet. Breaking under HB 607 requires tracks to pay to the nearest penny, resulting in more money being returned to horse players. Koenig cited the example of 2018 Triple Crown winner Justify, who paid $7.80 on a $2 winning bet on the Kentucky Derby, a payout that would have been $7.92 without the break.
The Kentucky Equine Education Project (KEEP) issued this statement following the passage of HB 607:
KEEP applauds the Kentucky General Assembly for the passage of HB 607, legislation that will modernize pari-mutuel taxes.
A great deal of work went into crafting this new tax policy and KEEP thanks the legislators who served on the Pari-Mutuel Gambling Tax Task Force for the time and effort they put into fully understanding the economic structure of the Kentucky equine industry. We would also like to applaud Senate Majority Floor Leader Thayer and Rep. Koenig for their leadership as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing state revenue while not arbitrarily raising tax rates in a way that could harm the economic success of the industry.
The entire horse industry participated in this process and KEEP was proud to work closely with legislators to ensure they had access to the full picture of the economic benefits the industry has for the Commonwealth.
KEEP will continue to work on behalf of the entire Kentucky horse industry and community to advocate for policies that benefit everyone within the industry’s economic ecosystem. Increasing the success of the industry’s more than 60,000 jobs and $6.5 billion economic impact in the state benefits all Kentuckians.
His. @damon_thayerwho co-chaired w @RepKoenig The task force that led to HB 607 tells the Senate that the bill ‘I believe has us on track to become the most lucrative year-round racing circuit in North America in the next 18 to 24 months’ . #kystrong #KTDF @SenatorSchickel @NationalHBPA pic.twitter.com/dRchvPmcOu
– KyHBPA (@KyHBPA) March 29, 2022
We appreciate #KYSenate to bring #HB607 to today’s passage 33-1. The reforms protect 60,000 jobs and position KY Racing for future growth. Thanks to @damon_thayer @repkoenig @DeniseharperAn1 Matt Koch and Ors. for his leadership of the pari-mutuel gambling tax task force pic.twitter.com/Ar6nxeUoyv
— KY Tbred Association/KTOB (@KYTbred) March 29, 2022