Earlier this year, when the Kentucky legislature passed a bill clarifying the legality of historical horseracing machines, lawmakers pledged to review HHR tax rates. Critics have long stated compared to other states, Kentucky does not receive a fair share of revenue from HHR machines in return for allowing racetracks to offer them.
Now state Senate Majority Floor Leader and former racing executive Damon Thayer and state Rep. Adam Koenig have been named to co-chair the 10-member the Parimutuel Wagering Taxation Task Force that will examine the amount of taxes racetracks pay to the state from HHR machine revenue. Kentucky racetracks agreed to the committee as part of the legislature’s effort to pass the clarifying bill.
Currently the state’s general fund receives 1.5 percent of the handle after funding for thoroughbred and standardbred horse breeding development is subtracted. According to the Kentucky Horse Racing Commission, $531.8 million was bet at the state’s HHR parlors in April. Of that, the tracks received $46.1 million and the state’s general fund received $3.7 million, or about 8 percent of the tracks’ revenue. The total comes to 17.3 percent when the breeding development funds of $4.3 million are added.
Racetracks are the only businesses in Kentucky allowed to operate the devices, which have proliferated throughout the state since they were authorized by the Kentucky Horse Racing Commission in 2012.
The Kentucky Equine Education Project, which promotes the horse industry in the state, said in a statement it will work with the committee to ensure the tax structure is fair to the state. The horseracing industry in Kentucky is responsible for 60,000 direct and indirect jobs.
