Bill seeks to end steep tax

The Senate passed a bill on Tuesday night that would clear the way for U.S. tracks to seek out customers in other countries and to allow Canadian residents to wager directly into U.S. pools.

The bill would repeal a 30 percent withholding tax levied on racing bets placed outside the country. Officials from U.S. tracks have said that the withholding tax prevents them from opening up U.S. pools to international bettors, and the tax runs counter to the position of the World Trade Organization.

The tax prevents Canadian residents from wagering directly into U.S. pools, even on events like the Breeders' Cup and Kentucky Derby. Canadian tracks currently form separate pools to handle wagering on U.S. races.

The repeal of the tax was added as an amendment to the Senate bill. The House has yet to make substantial progress on its own version of the bill, but it is expected to pass some form of the legislation by the end of the summer, racing lobbyists said Wednesday.