Kentucky lawmaker files bill to eliminate breakage, re-introduces sports betting bill
A Kentucky legislator has introduced a bill that would eliminate breakage – the practice of rounding parimutuel payouts down – and has re-introduced a bill to legalize sports betting in the state.
Rep. Adam Koenig, a Republican who represents parts of two northern Kentucky counties, filed the bills Monday. The breakage provision is contained in a larger bill that sets parimutuel tax rates at 1.5 percent regardless of the location of where the bet is placed.
Koenig, a real estate agent, is a horseplayer who lives near Turfway Park and who was the co-chair of a special committee, the Pari-Mutuel Taxation Task Force, that was created last year after legislators narrowly approved a bill to legalize historical horse racing machines. The tax-and-breakage bill grew out of work that the committee did over the past year, Koenig has said.
Koenig has said in interviews that eliminating breakage will return more money to bettors without exacting much pain on the state’s racetracks, which currently retain breakage. Koenig has noted that breakage rules were first implemented to speed up payouts when nearly all players bet through a live mutuel teller, a practice that is becoming increasingly rare at tracks.
“Obviously, those days have come and gone, and it’s time for our laws to reflect today’s reality,” Koenig said during a recent appearance on an audio show at TDN.com.
In Kentucky, payouts are rounded down to the nearest 10 cents per $1 base wager. For example, if the distribution of a win pool called for an exact payout of $5.21 or $5.39, both would pay out at $5.20.
Pat Cummings, who heads the Thoroughbred Idea Foundation, an organization that presses for issues that it says are important to horseplayers, praised the move.
“This is an exciting step for horseplayers, not only in Kentucky but really anyone in America or around the world who bets into the pools offered on Kentucky racing,” he said. “We are hopeful for its favorable passage, and in the end, for providing horseplayers with the most substantive reform of breakage provisions in American history.”
Koenig had said earlier this year that he intended to introduce the bill permitting sports betting, but it is unclear how much support the measure will get in the legislature, which is dominated by Republicans. Although many legislators have a long history of supporting horse racing, the legislature’s overall support for expanded gambling is hard to gauge. Two years ago, opponents of a sports-gambling bill introduced by Koenig killed it by attaching onerous amendments to it.
Koenig has said that allowing sports betting within Kentucky would keep gambling dollars from flowing to other states that allow the practice or are considering legalization. Sports betting is now legal in Illinois, Indiana, Ohio, West Virginia, Virginia, and Tennessee.