Here we go again. Another Takeout Increase

[iwearpurple]

A Kentucky legislator has introduced a bill that would place a one-half percent tax on all wagers made by Kentucky residents through account-wagering operations, according to legislative records.

Rep. Larry Clark, a Democrat from Louisville who is the speaker pro tem, introduced the bill on Wednesday to the House. As of Thursday afternoon, it had not yet been scheduled to be heard.

The bill would require the tax to be split three ways, with one-third going to the Kentucky Racing Commission, the state's regulatory authority, another third going to the racetrack that is running a live race meet at the time, and the other third going to the purse account at the live racetrack.

The tax would be added to the takeout, so it is likely that account-wagering companies would pass that cost on to their customers.

[FenceBored]

A Kentucky legislator has introduced a bill that would place a one-half percent tax on all wagers made by Kentucky residents through account-wagering operations, according to legislative records.

Rep. Larry Clark, a Democrat from Louisville who is the speaker pro tem, introduced the bill on Wednesday to the House. As of Thursday afternoon, it had not yet been scheduled to be heard.

The bill would require the tax to be split three ways, with one-third going to the Kentucky Racing Commission, the state's regulatory authority, another third going to the racetrack that is running a live race meet at the time, and the other third going to the purse account at the live racetrack.

The tax would be added to the takeout, so it is likely that account-wagering companies would pass that cost on to their customers.

The Kentucky legislature cannot raise takeout on NYRA races. They can say that .5% of the handle bet through an ADW on NYRA races by KY residents be paid to the state/KY track-horsemen, like a source market fee where the state takes a cut. Doesn't effect takeout in the least, just the ADW's bottom line.

[lamboguy]

i really wonder how the hell these people get elected to begin with. the idea behind any business is to figure out how to get the amost amount of bottom line revenue that you can earn. govenrment is a business and raising taxes and fees and takeout rates often produce the opposite of what you are looking for. by raising takeout fees i will guarantee you in this instance that it will decrease the amount of revenue by more than what he though he could ever possibly think about raising it. this guy that proposed this measure must be shown the door immediately.

[Robert Goren]

You can bet someone in the racing industry is behind this. There is not a state legislator anywhere in country smart enough to come with something this complicated by himself. Three way splits are way over their heads. ;)

[Ian Meyers]

The Kentucky legislature cannot raise takeout on NYRA races. They can say that .5% of the handle bet through an ADW on NYRA races by KY residents be paid to the state/KY track-horsemen, like a source market fee where the state takes a cut. Doesn't effect takeout in the least, just the ADW's bottom line.


Other than the fact that ADWs will have less to give back to KY players, either in the form of points and freebies or cash rewards. Will certainly adversely affect money bet through the pools.

[dutzman]

This current Kentucky Legislature is so screwed up and out of whack to begin with. This is just more proof how out of touch our Legislators in KY our with the horse industry as whole. They already tax our winnings, now they want to tax our losings.

Edited to add the link to the article.

http://www.courier-journal.com/article/20100203/BUSINESS/2030401/1037/SPORTS08/Bill+would+tax+Kentuckians++online+race+bets

[FenceBored]

Other than the fact that ADWs will have less to give back to KY players, either in the form of points and freebies or cash rewards. Will certainly adversely affect money bet through the pools.

No argument on that. The small player who isn't getting rebates won't see any direct change in their situation; the large player who is getting rebates will get smaller ones.

[Horseplayersbet.com]

No argument on that. The small player who isn't getting rebates won't see any direct change in their situation; the large player who is getting rebates will get smaller ones.
The smaller player still gets squeezed by this too. They wind up cashing less money if they live in Kentucky and they bet Kentucky tracks, because this looks like it means Kentucky tracks will be upping their takeouts by half a point.

[Ejmenz]

Betting websites are able to offer 5% rebates on Horse Races.

That's like someone setting up a BigMac stand next to McDonald's and selling the same food but 5% cheaper.

I'm guessing McDonald's would make some changes if they can't stop the sales.

Horse Racing can't stop the off shore websites.

People will eat the cheaper BigMac.

Drop the takeout, and begin competing in earnest.

[FenceBored]

The smaller player still gets squeezed by this too. They wind up cashing less money if they live in Kentucky and they bet Kentucky tracks, because this looks like it means Kentucky tracks will be upping their takeouts by half a point.

This is an excise tax on handle put through an ADW, not an increase in takeout at Kentucky tracks, unless there is more to the bill that what is in the CJ article.

Currently, the state does not collect excise taxes on bets made by Kentucky residents through account wagering companies as it would if the bets were made at a Kentucky track or simulcasting facility.The tax would be similar to ones imposed by Illinois and Virginia on account wagering.
-- http://www.courier-journal.com/article/20100203/BUSINESS/2030401/1037/SPORTS08/Bill+would+tax+Kentuckians++online+race+bets

The little folks may get squeezed by the differences in the pools' makeup after the Ky folks getting a rebate modify their play, but that's all.

[Zman179]

The Kentucky legislature cannot raise takeout on NYRA races. They can say that .5% of the handle bet through an ADW on NYRA races by KY residents be paid to the state/KY track-horsemen, like a source market fee where the state takes a cut. Doesn't effect takeout in the least, just the ADW's bottom line.

The .5% could also be implemented as a surcharge on winnings like in Illinois and New York (their surcharges are higher).

[FenceBored]

The .5% could also be implemented as a surcharge on winnings like in Illinois and New York (their surcharges are higher).

It could, but in this case it's not (http://www.lrc.ky.gov/record/10RS/HB368.htm).


Interesting sideline to this story. In order to be able to enforce this tax the states mandates the books of the ADW be open for inspection in regards to KY residents. Of course, to ensure that all KY residents are being taxed properly I don't see how they don't get access to the wagering records of all customers. Of course, other states have already mandated this.

From the bill (http://www.lrc.ky.gov/record/10RS/HB368/bill.doc), for SPMO, read ADW:

(c) Every SPMO shall keep its books and records in such a manner that:

1. Kentucky residents having accounts with the SPMO can be individually identified and their identity and residence verified; and

2. The amount wagered through each account held by a Kentucky resident and the date of each wager can be determined and verified.

[chickenhead]

The Kentucky legislature cannot raise takeout on NYRA races. They can say that .5% of the handle bet through an ADW on NYRA races by KY residents be paid to the state/KY track-horsemen, like a source market fee where the state takes a cut. Doesn't effect takeout in the least, just the ADW's bottom line.

In theory, why couldn't an ADW could add a "wagering fee" of 0.5% for a KY resident to make a bet, similiar to TVGs wagering fee of $0.25. That it doesn't effect "top-line" takeout is by decision of the ADW, no?