FRANKFORT, Ky. – The horse racing industry suffered during the pandemic, with the exception of historic horse racing.
What you need to know
- Kentucky lawmakers revised the state’s gambling laws to make historic horse racing legal again earlier this year
- The debate led to the creation of a new task force to deal with the taxation of HHR machines
- The Pari-Mutuel Wagering Taxation Task Force met for the first time on Friday
- Kentucky generated $ 27.4 million in tax revenue of $ 356.6 million that the horse racing industry got from these machines
People poured more than $ 4 billion into slot machines in the past fiscal year, and that’s only 11 months of Kentucky Horse Racing Commission data as June earnings have not yet been recorded.
“It will fuel the growth of wallets which will increase the growth of the horses that run on the Kentucky circuit, which means that more of them will be bred here, more of them will live here, and those are jobs,” says Rep König (R-Erlanger) said.
The Kentucky Supreme Court ruled last September that historic horse racing machines, where the game itself was based on horse races played in the past, did not comply with the state’s strict gambling laws, so lawmakers revised them.
A working group formed during this debate to investigate how historic horse racing machines are taxed met for the first time on Friday. Koenig is co-chair.
“Today’s meeting was really aimed at getting everyone on the same page and understanding tax rates,” he said. “They are basically different for each type of bet.”
Of the $ 4.1 billion wagered on historic horse racing machines last year, 91% went back to bettors.
The horse racing industry received $ 356.6 million and Kentucky only $ 27.4 million in tax revenue.
Some lawmakers, including House Minority Floor Chairman Joni Jenkins (D-Shively), wonder if that’s enough.
“I think we have to look at all of this. My first look at it – and I’m very willing to listen to the conversations from all sides, from the horse industry, from other lawmakers – but my first look is yes we have to increase it, ”she said. “But it has to make sense on the whole with all the other types of racing controls we have.”
Kentucky currently levies a 1.5% excise tax on the amount of the machines brought in for operators.
“It doesn’t make sense that historic horse races should be taxed at a lower rate than real horse races,” said Morgan McGarvey (D-Louisville), the Senate minority chairman.
But the task force will look at every facet of horse betting, and some members, including Senator Majority Floor Chairman Damon Thayer (R-Georgetown), are not convinced that anything needs to be changed.
“It may be complicated, but I’ll say this: It works pretty well, and I don’t think we’d make changes for granted,” he said.
Koenig said any increase in historic horse racing could result in lower payouts.
“The operators will make their money from these machines and if we raise taxes, it will come from the players,” he said.
But he’s still open to raising taxes on the machines, and talks will continue until the next legislative session in January.
Other areas the task force will investigate include contributing tax revenue to a fund for services to support gambling addicts, Koenig said.