Bill would tax off-site wagering on Kentucky horse races

bmusgrave@herald-leader.comFebruary 21, 2012 

FRANKFORT — A measure that would tax bets on horse races made online or on the phone passed the House budget committee on Tuesday.

House Bill 229 would allow a tax of 0.05 percent on bets made through advanced-deposit wagering sites by Kentucky bettors. From that 0.05 percent, about 15 percent would go back to the state's general fund, and about 85 percent would go to racetracks. The tracks would have to use 50 percent of their share to pump up purses for Kentucky horse races.

The bill's sponsor, Democratic Rep. Larry Clark of Louisville, said the measure would allow the state to get a glimpse of how much money is wagered through online or phone wagering systems. A legislative analysis estimated that the state would receive a little less than $50,000 a year, but no solid figures exist.

Bets placed in person at Keeneland or Churchill Downs are taxed. But when people wager online or through mobile devices at a racetrack, the bet is not taxed, and no money goes to the Kentucky Thoroughbred Development Fund, which is used to increase race purses.

Rep. David Osborne, R-Prospect, a horse owner, told the House Appropriations and Revenue Committee that advanced-deposit wagering is now the fastest-growing segment of horse track wagering. But overall, wagering on horse races is down.

Churchill Downs recently invested $86 million in a call center for advanced-deposit wagering and now employs 130 people. Clark said Churchill Downs does not oppose the bill.

The House panel unanimously approved the bill on Tuesday. It will now go to the full House for a vote, where it will likely pass.

The Senate has approved similar legislation in the past, but the two sides have not been able to iron out differences between the two measures. Clark said Tuesday that he believes the House and Senate will work out their differences this legislative session.

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog:

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