Kentucky may raise taxes on “historical racing” slots

The House is divided on whether to increase tax on HHR machines.
The House is divided on whether to increase tax on HHR machines.

Lawmakers are thinking of raising the tax rate on historical horse racing from the current 18 per cent. 

US.- Kentucky lawmakers are considering increasing the tax rate on “historical horse racing”, slot machine-like forms of gambling that base results on already-run races. The current tax rate is 18 per cent, just a fraction of the tax rates of Indiana (27 per cent) and Ohio (34 per cent)

The House is divided on the issue. Many legislators advocate higher taxes so more money can be brought in for the state. However, Thomas Lambert, a professor at the UofL College of Business, told a legislative hearing that the increased tax might have a negative effect, as it could lead to a decline in the number of patrons.

According to Lambert, by increasing the tax rate, operators will be forced to lower the payouts, thus patrons will go to gambling facilities in Indiana or Cincinnati.

Sen. Damon Thayer is also against increasing taxes. He stated that if more venues offer the machines, more new jobs will be created and more taxes will be paid.

HHR machines are owned by major racetracks in Kentucky: Red Mile, Churchill Downs and Keeneland. Five racinos have opened across the state and one is planned for downtown Louisville-.

The legislature officially sanctioned historical racing machines last year, but they have been operating in the state for over a decade. In 2020, Kentucky generated $15m in taxes from the segment, which some critics have stated is too low because the total handle was $3bn.

A group of 17 organisations sent a letter to lawmakers urging them to raise taxes on the machines during this year’s legislative session.

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