03/31/2014 3:00PM

Kentucky to tax account wagers, Instant Racing

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The Kentucky legislature reached a deal on a budget Sunday that reinstates a 1.5 percent tax on Instant Racing machines and assesses for the first time a 0.5 percent tax on bets made through account-wagering companies.

The 1.5 percent Instant Racing tax was inserted into the budget to address a recent court ruling that said a regulation enforced by the Kentucky Horse Racing Commission to tax handle at the same rate on the slot-like machines was unlawful. The 1.5 percent tax will go toward the state’s general budget.

In the same ruling, the court said that a lower court needs to determine whether Instant Racing is legal in Kentucky. The case is expected to be heard later this year.

Kentucky Downs and Ellis Park operate the machines, which use the results of previously run races to generate payouts. Keeneland and the Red Mile, two Lexington tracks, have filed applications to operate the devices. The applications will be heard at the Kentucky Horse Racing Commission’s meeting Wednesday.

Legislators have considered the tax on account-wagering handle in the state for several years to make up for falling revenue going to the Kentucky Thoroughbred Development Fund because of the migration of handle from racetracks to account-wagering sites. While ontrack handle is taxed at a 1.5 percent to 3.5 percent rate, account-wagering handle in the state has never been taxed.

The tax will be applied to wagers made by Kentucky residents and will be paid by account-wagering companies.

jttf More than 1 year ago
tax tax tax.....just make it 100 % takeout and quit wasting everyone's time. the takeout is impossible to beat already. please hire someone who is intelligent enough to understand.
Walter More than 1 year ago
Watch out for all the negative replies to your post. Seems like whenever I mention lower takeout, it goes negative right after. I don't understand because all horseplayers should want a lower takeout. Shouldn't they?
jttf More than 1 year ago
its just like giving ryan braun a standing O. they just dont understand. hong kong is 16 % take with large fields. when is hong kong's triple crown ?