10/11/2004 12:00AM

Tax bill one step from being law


LEXINGTON, Ky. - The U.S. Senate passed a bill on Monday that would allow tracks in foreign countries to commingle their bets into U.S. pools without paying a 30 percent withholding tax on each wager. The bill has been sent to President George W. Bush, who is expected to sign it.

The most immediate impact of the bill would be to allow Canadian bettors to wager into American pools. Canadian tracks currently set up separate pools for American races because of the tax.

Many racing companies, including Churchill Downs Inc. and Magna Entertainment, have their eyes on Europe, where American racing is shown during prime-time evening hours. The National Thoroughbred Racing Association has estimated that bettors around the world wager $85 billion on horse races, with $15 billion coming from bettors in North America.

The elimination of the tax has been a focus of the NTRA's lobbying arm for three years, but previous efforts have failed because some believe the elimination of the tax would be perceived as a handout to foreign companies and domestic racetracks. Racing lobbyists have argued that since no foreign racetracks were allowing betting into American pools because of the tax, the government was not losing any money by eliminating it.

"It is gratifying to see this measure one step closer to passage," Greg Avioli, the NTRA's president, said Monday. "Opening new markets and increasing international common pooling will surely benefit NTRA member tracks and horsemen."

Breeders' Cup Ltd., which merged with the NTRA in 2001, has allowed bettors in several countries that have tax treaties with the United States - France, Ireland, and South Africa, for example - to bet directly into its pools. The organization will now begin targeting bettors in Central and South America, along with other countries in Europe, for future Breeders' Cup events, according to Ken Kirchner, a senior vice president at Breeders' Cup Ltd.