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Horse race betting bill passes Ky. House

Medina Spirit and John Velazquez, former winners of the 147th Kentucky Derby. The Kentucky Horse Racing Commission has since disqualified them.
Medina Spirit and John Velazquez, former winners of the 147th Kentucky Derby. The Kentucky Horse Racing Commission has since disqualified them.

The system most commonly used to bet on horse races in Kentucky would receive a tax overhaul under a bill the House passed Monday.

House Bill 607 would establish a single tax rate of 1.5% for pari-mutuel wagering in the state, including bets placed by phone, at track betting windows and at slot-like historical horse racing machines.

The bill’s sponsor, Republican Rep. Adam Koenig of Erlanger, said that right now, bettors are taxed at different rates depending on how they place their bets. He said his bill would “modernize” pari-mutuel wagering in the state and bring in around $27 million in additional state funds in the first few years.

“And we’re going to take care of the bettors, and in addition to taking care of the bettors we are going to make Kentucky the most desirable place, if you want to wager on horses, in North America,” Koenig said.

Though the bill did have bipartisan support, it also faced opposition from both Democrats and religious conservatives. Both shared concerns that the tax rate is too low.

Republican Rep. Josh Calloway of Irvington, said gambling is an irresponsible way to raise revenue, but if the state is going to do it, then it should benefit as much as possible. He introduced a floor amendment to bump the rate to 6%, but it failed.

“When I stand up, or others stand up to speak up and speak out against this they think maybe this is a rural issue or maybe some radical religious issue, but this is a cultural issue,” Calloway said. “For hundreds of years we have not been at the point we are at right now for a reason.”

Democratic Rep. Nima Kulkarni of Louisville, compared the wealth of Churchill Downs racetrack with the cracked sidewalks of the surrounding neighborhoods. She described the 1.5% tax rate as an insult that subsidizes corporations like Churchill Downs to the detriment of residents.  

“We are losing here and need to stop being beholden to corporations that have not treated us fairly and have not operated in good faith,” Kulkarni said.

House Bill 607 passed 66-29 and now moves to the Senate.

The House also passed a bill that would set up a problem gaming assistance fund for awareness, prevention and treatment for gambling addiction. The original bill would have used a $225 million settlement from the gambling website PokerStars to establish the fund, but lawmakers cut the amount to $50 million before passage.

Ryan Van Velzer is WFPL's Energy and Environment Reporter. Email Ryan at rvanvelzer@lpm.org.