House Bill 607, co-sponsored by Rep. Adam Koenig of Erlanger, has officially passed the Kentucky Senate with a final vote of 33-1. There was one abstention.
The bill will now return to the House of Representatives to concur on changes made in the Senate before being sent off to the desk of Gov. Andy Beshear. If the House concurs, Beshear can then decide whether to sign it into law, or veto.
“The recommendations here in the bill are a result of six months of study, analysis and testimony about our signature horse racing industry provides over 60,000 jobs in the Commonwealth, billions of economic impact, including jobs in the tourism and agriculture sector and should position us to continue our industry-leading, year-round purse schedule which I believe has us on track to be the most lucrative, year-round racing circuit in North America within the next 18 to 24 months,” Sen. Damon Thayer of Georgetown said.
The measure would adjust the tax structure on horse betting and pari-mutuel betting, which is a form of betting in which those backing the first three places divide the losers’ stakes. There’s a proposed flat 1.5 percent tax for all pari-mutuel wagering, which includes advance deposit wagering, simulcast bets, and historical horse racing. The tax rate would lower from its current rate of 3.5 percent on live wagers and 3 percent on simulcast bets made in Kentucky on out-of-state races. Race tracks would now be required to pay out to the nearest penny on a one dollar bet, rather than the nearest ten cents due to the elimination of breakage.
House Bill 607 would also require the Kentucky Horse Racing Commission to self-fund with revenue from historical horse racing. The Thoroughbred Development Fund would be capped at $40 million. Standardbreds would be capped at $20 million. This measure reduces the overall amount going into these funds, providing more money for the state’s General Fund.
The pari-mutuel tax has funded the University of Louisville Equine Program, and will now fund also the equine programs at the University of Kentucky and the Bluegrass Community and Technical College. There is language in the bill that would require the regulatory body of horse-racing, the Kentucky Horse-Racing Commission, to be self-funding. That free up another $3.8 million for the General Fund once the bill is implemented, according to Thayer.
The bill will also require the Historic Horse Racing operators to maintain a self-exclusion list of people who self-identify as problem gamblers. This is a standard practice that casinos in other states use on a regular basis.
“As the daughter of a lifelong thoroughbred trainer, I was really pleased to be able to serve on this committee, the Pari-mutuel Wagering Task Force, with our leader. This is good legislation. I’m proud to vote “aye” for it,” Sen. Denise Harper Angel of Louisville said.
The Kentucky Equine Education Project praised the passing of House Bill 607 in a press release sent out on Tuesday.
“KEEP applauds the Kentucky General Assembly for the passage of HB 607, legislation that will modernize taxation on pari-mutuel wagering.
A tremendous amount of work went into crafting this new tax policy and KEEP is grateful to the legislators who served on the Pari-Mutuel Wagering Taxation Task Force for the time and effort they put into fully understanding the economic structure of Kentucky’s horse industry. We would also like to applaud Senate Majority Floor Leader Thayer and Representative Koenig for their leadership as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing revenue for the state, while at the same time not arbitrarily raising tax rates in a way that would damage the economic success of the industry.
The entire horse industry was engaged in this process and KEEP was proud to work closely with legislators to ensure that they had access to the full picture of what economic benefits the industry has on the Commonwealth.”