Is the legislature leaving money on the table by not taking up tax on online horse betting?

03/20/2013 05:43 PM

A growing part of horse race betting could yield extra money for racing purses and the state coffers, but lawmakers haven’t embraced it yet.

Republican Rep. David Osborne, R-Prospect, and Democratic Rep. Larry Clark, D-Louisville, proposed a tax on online bets, such as those placed on Churchill Downs’ site.

“Many people think it’s a tax increase,” Osborne said of the tax proposal on Pure Politics. He also laid out his counter to that (6:45).

“It’s the exact same product we’re taxing every other way … at the track and with simulcasting,” Osborne said.

The measure has passed the House but stalled in the Senate. As House and Senate lawmakers scramble for sources of revenue to cover the cost of increasing money the state puts into the public pension system, this could be an example of leaving money on the table, Osborne said.

House Democrats proposed capturing more money for the state coffers from receipts from instant racing — a game that allows patrons to bet on previously-run races on video terminals. The Family Foundation of Kentucky has questioned whether the game violates the constitution, a case that’s currently pending before the Kentucky Supreme Court.

Osborne also said he believes that it is constitutional as a form of parimutuel wagering. And he said he expects the Kentucky Supreme Court to uphold it.

“The business model for instant racing is not a great business model. It’s difficult to justify the investment that it takes based on that business model. But I think it’s good for the industry,” Osborne said (2:40).

Osborne also addressed the concerning trends of 4 percent drops annually in racing fan attendance and the effect of casinos on that (4:30).


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