In debate over taxes on Ky’s historical racing sector, facts matter.
In November, the Legislative Research Commission held its last of five meetings of its pari-mutuel wagering Taxation Task Force, co-chaired by Senator Damon Thayer and Representative Adam Koenig. The General Assembly and racing industry committed to examine the tax rate on historical racing upon passage of Senate Bill 120, which added the definition of historical racing to Kentucky Statutes.
The task force heard from twenty individuals from industry, academia, and public advocates in five public meetings, and have drafted a report, recommending review of the admissions tax on tracks, evaluation on taxes on live racing, consideration of the funds the University of Louisville and other state university equine programs at the University of Kentucky and regional universities could receive funding from the pari-mutuel tax, and evaluating the potential of sport wagering. The task force did not recommend increasing the tax rate on Historical Racing.
Recently, Linda Blackford’s Nov. 23 column on the task force included comments from Martin Cothran, spokesperson for the Family Foundation. Mr. Cothran says the task force recommendations seemed a foregone conclusion, making a connection to legislators with close ties to our industry. Mr. Cothran goes on to say historical racing machines aren’t taxed like horse racing, and that historical racing in Kentucky is taxed half of that of our northern neighbors in Indiana and Ohio.
Facts matter. Bets made on-track on live racing at Keeneland, and its sister tracks are taxed at 1.5%. Indeed, the five meetings demonstrated how complex the tax structure on horse racing and gaming in Kentucky and surrounding states is. Mr. Cothran fails to mention surrounding states’ (Ohio and Indiana) tracks and casinos operating in can deduct their business expenses and pay taxes on net income. Advocates for increasing the tax rate conceded during testimony the effective rate paid by our industry is higher than 1.5%. A record of all the testimony can be viewed here [https://apps.legislature.ky.gov/CommitteeDocuments/349/]. As in most things in life, its best to judge things for yourself.
Horses provide 60,000 jobs for Kentucky and over $6 billion in economic impact. Historical racing has enabled Kentucky’s horse industry to thrive while other jurisdictions are contracting, providing direct, indirect, and induced jobs, new investment and returns to the communities these new projects are operating in. It has strengthened our live racing product and functioned as a multiplier to existing and new revenue streams which are also taxed, meaning more returns to the General Fund over time. Having a citizen legislature means, gratefully, there are members of the General Assembly who recognize our economic contribution.
Chauncey Morris is Executive Director of the Kentucky Thoroughbred Association and Kentucky Thoroughbred Owners & Breeders,