Kentucky State Rep. Adam Koenig Discusses Breakage Bill On Writers’ Room

Breakage, the practice of rounding down bettors' payouts to the nearest 10 or even 20-cent number rather than paying the deserved amount to the penny, has long been a thorn in horseplayers' sides. Kentucky state representative Adam Koenig, an avid horseplayer himself, is trying to do something about it in his state. Wednesday morning, Koenig joined the TDN Writers' Room presented by Keeneland as the Green Group Guest of the Week to discuss the bill he's sponsoring to eliminate breakage in Kentucky, as well as his proposed sports betting legislation, the successful effort to protect historical horse racing in the Bluegrass and more.

“Breakage laws go so far back that we can't even figure out when they were passed in Kentucky, but there was a time 100 years ago when the only place to go and legally make wagers was the racetrack,” Koenig explained. “The lines were deep and it was something done to make it easier to cash people out. They didn't have computer to figure out how much was being wagered. They were counting the money in the back and figuring out the odds by hand in real time. But obviously those days have come and gone, and it's time for our laws to reflect today's reality. Now we have an opportunity to do something about it, and this is going to be a comprehensive parimutuel wagering modernization bill.”

Koenig added that, especially in Kentucky with skyrocketing purses and the lucrative historical horse racing machines, accurately paying winning horseplayers is a matter of fairness.

“I live five minutes from Turfway,” he said. “Churchill Downs is building a beautiful facility there. They've got multiple facilities in Louisville. They've got a harness track in Hopkinsville. They're making plenty of money on the HHR facilities and I think, certainly on the breakage front, they can stand to help the bettors. We've taken care of the tracks. We've taken care of the breeders and the trainers and the jockeys. We need all of them to make the show run. But we also need bettors to make the show run. And by God, I'm going to take care of the bettors, not just because I am one, but because we need to take care of those folks without whom we don't have an industry.”

Elsewhere on the show, which is also sponsored by Coolmore, Lane's End, West Point Thoroughbreds, XBTV, the Kentucky Thoroughbred Owners and Breeders and Legacy Bloodstock, Joe Bianca, Bill Finley and special guest co-host Randy Moss of NBC Sports touched on Michael Beychok's decision to stop playing the horses, the beginning of the trials in the doping scandal, the proposed four-race campaign of Flightline (Tapit) and more. Click here to watch the podcast; click here for the audio-only version or find it on Apple Podcasts or Spotify.

The post Kentucky State Rep. Adam Koenig Discusses Breakage Bill On Writers’ Room appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Taking Up For Bettors: Kentucky Rep. Koenig Seeks To Eliminate ‘Breakage’

Kentucky State Representative Adam Koenig is taking up the banner for the most-neglected component of horse racing: the bettors.

Koenig is co-chair, with Sen. Damon Thayer, of the Pari-Mutuel Wagering Taxation Task Force appointed to review taxation policies on gambling on the Commonwealth's horse-racing products. Koenig said on last Friday's Kentucky Racing Spotlight weekly radio show on Louisville's ESPN 680 that based on the task force's findings, he will introduce legislation for a flat 1.5-percent tax on the gross (before winning bettors are paid off) of pari-mutuel wagers, including the highly successful historical horse racing operations. Such a measure would substantially increase the tax on bets placed on Kentucky racing through online platforms, known as Advance Deposit Wagering (ADW).

Another provision Koenig is championing in the bill he plans to introduce during the current 2022 state legislative session: rounding payoffs down to the penny, rather than down to the dime on a $1 mutuel.

The practice of rounding down is known as breakage. It's a decades-old policy that allows racetracks and any licensed bet-taker, including ADWs, to keep the extra money, to the frustration of horseplayers who believe it should be returned to winning bettors.

“The thing I'm perhaps most excited about is the elimination of breakage on live racing,” Koenig told Kentucky Racing Spotlight hosts Joe Clabes and Jennie Rees on the show. “It's something that happens at every track everywhere. Win, place, show … they (pay off) – at least in Kentucky and most other states – to every 20 cents (on a $2 mutuel). You pay $3.20 or $3.40 or $3.80. But it doesn't work out that way. You might deserve $3.47 or $3.68. We're going to try to make that happen. Because it's your money and it goes back to – I don't know, the 1930 or 40s – when the only place you could gamble legally was the track. There were long, deep lines, and they didn't want to pay everybody to the penny every time they came up.”

If Koenig is successful, Kentucky would be the first state to essentially eliminate breakage. New York, with a sliding breakage calculation, is the only state in the last 30 years to address breakage, but the proposed plan for Kentucky is easily the most player-friendly of any, according to industry expert Pat Cummings of the Thoroughbred Idea Foundation.

“I think not only will it be great for the bettors, but I believe it will be an incentive for people across the country to bet on Kentucky racing,” said Koenig, an Erlanger resident whose district in Boone and Kenton County is adjacent to Turfway Park. “Maybe if you're a bettor like me who bets $5 to win, place on a race, it's not that big a deal. But if you're somebody who doesn't mind betting $200 across the board on a horse, that adds up to real money over time. I think the tracks will get the money back with additional wagering.”

“… I'm not doing it to cost the (tracks) money or even to help their product. I'm doing it because with the passage of this HHR (legislation) and increasing the numbers of HHR machines, we've taken care of the breeders, taken care of the owners; the trainers and jockeys are running for bigger purses,” Koenig continued, referencing legislation passed last February to protect historical horse racing. “The only person we haven't taken care of is the bettor. You can't run the show without all of those people — but you have to have the bettors.”

[Story Continues Below]

The task force was convened in the wake of last year's passage of SB 120 that cleaned up the language to ensure that historical horse racing was legal under the Kentucky constitution. Some lawmakers felt HHR should be taxed at a higher rate, with more money going to the state's General Fund. Subsequent testimony documented that — by being taxed on the gross rather than on net revenue and with a mandated amount going toward purses for live racing — the excise tax on HHR is effectively 32.2 percent.

That places Kentucky's tax rate on the high end of surrounding states with casino gaming, testimony before the task force documented. While standardizing the 1.5-percent excise tax, Koenig's bill would increase the tax on online and phone wagers made in the state from 0.5 percent to 1.5 percent.

“There is a range of tax rates when you make a wager,” said Koenig, who continues to work on the language of the bill before filing. “… When you're at a track and you go to the window, go to a (self-bet) machine, there's a 1 1/2-percent tax on that. But if I am at Keeneland or Churchill Downs and I bet on a simulcast race, say Oaklawn, that's taxed at 3 percent. If I bet on that same race at Oaklawn on my phone, it's taxed at one-half of 1 percent. I'm sure these tax rates made sense when they were created. But now, they don't make so much sense.

“… I believe we're going to generate a fair amount of money, especially with raising the ADW tax from a half of a percent to 1 1/2 percent. It's very complicated because within those tax rates you're funding purses for thoroughbreds, for standardbreds, funding the University of Louisville (equine business) program. Funding pays for improvements at the track. It's more complicated than I ever thought. We're going to make it more even, so that it makes more sense, and we're going to generate some additional revenue for the General Fund.”

Koenig said his bill also will remove any restrictions on how Kentucky Thoroughbred Development Fund (KTDF) supplements can be used as long as recipient horses are foaled in the commonwealth and sired by a Kentucky stallion. The bill would leave it up to the Kentucky Horse Racing Commission's KTDF advisory committee to set the policy but would be expected to allow the Kentucky-bred supplements to be added onto claiming races for the first time.

Among other likely provisions:

Funding for the equine programs at the University of Kentucky and the Bluegrass Community & Technical College.

Requiring that the horse-racing industry pay for the cost of its regulation, with the budget for the racing commission currently coming out of the General Fund.

Creation of a revenue stream to provide help for problem gamblers. HHR facilities would be required to maintain and share self-exclusion lists, where problem gamblers who ask to join the list will be refused admission to such properties.

Kentucky's 2022 legislative session runs through April 14.

Kentucky Racing Spotlight, presented by the Kentucky HBPA, will run Fridays from 6-7 p.m. ET through March 4 on ESPN 680/105.7 with streaming at espnlouisville.com, the ESPN 680 app and the iHeart and TuneIn apps. The shows are archived at davisinnovation.com/kyracing. In addition to the Kentucky HBPA, Kentucky Racing Spotlight is sponsored by Davis Innovation, NKY Tribune and the Louisville Thoroughbred Society.

The post Taking Up For Bettors: Kentucky Rep. Koenig Seeks To Eliminate ‘Breakage’ appeared first on Horse Racing News | Paulick Report.

Source of original post

Kentucky Legislative Task Force Won’t Recommend Raising Taxes On Historical Horse Racing

Kentucky's Pari-Mutuel Wagering Taxation Task Force will not recommend raising the tax rate on historical horse racing, according to an op-ed written by the Lexington Herald-Leader's Linda Blackford.

Representative Adam Koenig (R), who oversaw the task force with Senate Floor Majority Leader Damon Thayer (R), plans to instead devise legislation that would standardize the many different tax rates on different types of wagering, including a potential raise in the taxes on advanced deposit wagering.

“I'm trying to thread the needle between those who want an increase and those who want to do nothing,” Koenig told the Herald-Leader. “But I'm trying to thread it so we can generate more income.”

Other task force recommendations include losing the admission tax, evaluating the legalization of sports wagering, and donating a portion of historical horse racing proceeds to college equine programs.

Read more at the Lexington Herald-Leader.

The post Kentucky Legislative Task Force Won’t Recommend Raising Taxes On Historical Horse Racing appeared first on Horse Racing News | Paulick Report.

Source of original post

Legislative Committee Formed To Assess Tax Structure Of Historical Horse Racing

Sen. Damon Thayer and Rep. Adam Koenig have been appointed co-chairs of the Pari-Mutuel Wagering Taxation Task Force, which will study the taxes and rates related to horse racing, the impact that changing the rates would have, and the funds relating to the horse industry which receive historical horse racing tax receipts, eventually determining if any changes to those tax rates should be made.

Thayer is the Senate majority leader and a former racing executive, while Koenig sponsored the bill in the House clarifying the legal status of HHR machines.

Other members of the committee include: Julie Raque Adams, Christian McDaniel, Stephen West, Jonathan Dixon, Al Gentry, Matthew Koch, and Jason Petrie.

The Kentucky Equine Education Project, Kentucky's equine economic advocate, released the following statement on the appointment of the Pari-Mutuel Wagering Taxation Task Force:

“The Kentucky Equine Education Project (KEEP) commends the appointment of the Pari-Mutuel Wagering Taxation Task Force, the first step in ensuring an equitable tax rate for historical horse racing (HHR) that will result in increased revenue for the state and promote continued growth for Kentucky's nation-leading horse industry.

“During the legislative session when the preservation of HHR was discussed, Kentucky's horse industry pledged to work with the legislature to assess the tax structure of HHR, how those funds are allocated, what the impact would be on the industry and Kentucky's economy if the tax rates are changed, and determine if any changes should be made to the existing structure.

“KEEP stands ready to work with the Task Force and be part of the conversation on HHR to ensure that entire horse industry – all breeds and disciplines – continues to see benefit from HHR through incentive funds and other state programs. Additionally, it is paramount that changes to the tax structure of HHR are not detrimental to the horse industry's 60,000 direct and indirect jobs and its $6.5 billion impact on Kentucky's economy. KEEP looks forward to working closely with the Task Force to accomplish these goals.

“KEEP extends its gratitude to Representative Matt Koch and Representative Ruth Ann Palumbo for their legislative efforts to establish this Task Force.”

The post Legislative Committee Formed To Assess Tax Structure Of Historical Horse Racing appeared first on Horse Racing News | Paulick Report.

Source of original post

Verified by MonsterInsights