Bettor-Friendly Legislation Passes Kentucky Senate

By a vote of 33-1, the Kentucky State Senate has given their stamp of approval to Kentucky House Bill 607, which modernizes the taxation of pari-mutuel wagers and, in a major victory for horseplayers, eliminates the dime breakage than has been the standard for many years in favor of penny breakage. The change in the breakage will put more money into the pockets of horseplayers and is the first such measure to be introduced in the United States. The lone dissenting vote came from Republican Senator Whitney Westerfield.

“For more than a century, horseplayers have never received a full winning dividend and today the General Assembly in Kentucky affirmed that it is beyond time to change that and respect horseplayers anywhere betting on races from Kentucky,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF), which has championed the cause dating back nearly four years.

“Across just the last three decades or so, approximately $1 billion has been retained from winning bets across America. The passage of HB 607 will put some of this money back in the pockets and accounts of winning bettors from future bets.'

“We are thankful for the leadership of bill's House sponsors, Representatives Adam Koenig and Al Gentry, and Senator Damon Thayer in guiding its passage.

In addition to the favorable breakage rules, HB 607 calls for taxation on pari-mutuel wagers at 1.5%, the same rate assessed on Historical Horse Racing (HHR) machines. The standardization of taxation means that bets made through and ADW by Kentucky residents will be taxed at 1.5%, up from 0.5 %.

“Horse racing must relentlessly pursue every method to make its product as competitive as possible,” said Bernick. “The market pressure on racing is stronger than ever with the rapid legalization of sports betting across the country. We hope that operators realize the importance of retaining all customers and driving their participation through the presentation of competitive racing with competitive pricing.”

HB 607 was sponsored by Representative Adam Koenig. A house committee approved the legislation Mar. 16 before referring it to the Senate for its consideration. The bill now returns to the House for concurrence, but it is expected to sail through and head to the desk of Governor Andy Beshear for his signature.

The Kentucky Equine Education Project (KEEP) released a statement Tuesday, applauding the General Assembly for the passage of HB 607.

“A tremendous amount of work went into crafting this new tax policy and KEEP is grateful to the legislators who served on the Pari-Mutuel Wagering Taxation Task Force for the time and effort they put into fully understanding the economic structure of Kentucky's horse industry,” the statement read. “We would also like to applaud Senate Majority Floor Leader Thayer and Representative Koenig for their leaderships as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing revenue for the state, while at the same time not arbitrarily raising tax rates in a way that would damage the economic success of the industry.

“The entire horse industry was engaged in this process and KEEP was proud to work closely with legislators to ensure that they had access to the full picture of what economic benefits the industry has on the Commonwealth.

“KEEP will continue working on behalf of Kentucky's entire horse industry and community to advocate for policies that benefit everyone within the industry's economic ecosystem. Growing the success of the industry's more than 60,000 jobs and $6.5 billion economic impact on the state benefits all Kentuckians.”

Once signed off on by Beshear, the provisions of the bill are due to take effect come August.

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‘It’s Not Just The Big Guys’: Historical Horse Racing Supports Small Kentucky Tracks, Horsemen

As both the Kentucky State Senate and Kentucky House Committee for Licensing, Occupations and Administration Regulations passed SB 120 this week, Turfway Park horsemen are making their case for the importance of protecting Historical Horse Racing. They say protecting HHR, as it is known, is critical to saving Kentucky jobs, including their own.

HHR's future in Kentucky is uncertain following an opinion issued by the Kentucky Supreme Court in September. At risk is a significant revenue stream that has produced some of the best racing purses in the country, prompted track owners to make considerable facility investments and bolstered a year-round racing circuit on which Kentucky horsemen have come to depend.

Trainer Buff Bradley, a Kentucky native, left the state 11 years ago to winter in Florida and then New Orleans because purses had gotten so bad at Turfway Park. After purses increased last year, he convinced owners to stick around Kentucky.

“I was hoping Kentucky was going to be a stronger circuit, with Ellis doing well,” said Bradley. “It really looked like Turfway was going to be on the rise with Churchill buying it and purses increasing. Now I'm rethinking, 'Uh oh. I came here and it might have been too soon,' because things aren't looking as well with Historic Horse Racing machines maybe not going through. That's going to be the big question.

“Kentucky can be a great circuit,” he said. “I know last year everybody was thrilled. You've got owners who see a rising Kentucky, even with Ellis Park and Turfway's purses being better, they can afford to stay around here. And they live here. If they can do that, they're going to go to the sales and buy more horses. If we can keep more horses around here, we can keep everybody busy – more jobs. There's a lot to it.”

Bradley employees 12 people in his 20-horse stable at Turfway.

“The money has made a big difference,” he said. “It's not like we're getting rich off this, but it makes it affordable for people to stay and to meet people to buy horses. It's become a year-round circuit in Kentucky, which is a big plus. Because you keep the people here. This is our home.

“If we don't have HHR, I can see racing really decreasing here in the state. Horse racing will go down to Keeneland and Churchill basically. I can't see how Turfway, Ellis Park – those two tracks for sure – and even Kentucky Downs could survive. We'd probably decrease the number of days even at Keeneland and Churchill. And when that happens, it's tough to get stables to come in because there isn't going to be much racing. They're going to go to New York and Florida, areas where they have racing throughout the year.”

Groom Toni Ouzts, who has two children with her husband, veteran jockey Perry Ouzts, is concerned that if the Kentucky House does not pass the HHR bill, life will be more difficult for them.

“I need this job,” she said. “It's my livelihood. It's my passion. I'd be lost without it. And my husband would be out of work, too, if we would not have Turfway Park.”

Asked about people who would say that HHR just makes rich people richer, she said: “No. This is keeping me in a job. It's keeping my husband in a job, people I work with every day. We work seven days a week. This is more than a job. It's everything. My sister and I work here 'rubbing' horses together. And even her husband works on the front side. It's giving everyone a job.”

When discussing the potential of Turfway likely shutting down unless the HRR bill passes, she said she is surprised that Turfway's existence is even in doubt and it makes her sad.

“It's scary. It really is scary.”

Turfway “gives so many people job,” she said. “So many people would be out of work. Just think of the hay and straw people, the feed man. There's so much involved in horse racing. It's not just the big guys.”

Trainer Jeff Greenhill left a career as chemical engineer in Alabama to go into horse racing. He's been training about 25 years, wintering at Turfway Park throughout.

“This is the place that the little guy survives — here and Ellis Park,” Greenhill said. “There are 1,100 horses here, and I've got 18 and I have eight employees. You can do the math: There are a whole lot of people here employed by the horse-racing industry. Unless purses stay at a reasonable level, I'm out of business or I'm moving to New York, Florida or Indiana.”

Veterinarian John Piehowicz, who has served clients on the local racing circuit since the early 1990s, also sees difficult choices ahead without historic horse racing.

“If SB120 isn't passed then I think this (Turfway Park) is done,” he said.

Piehowicz says racing “is the one industry where trickle-down economics works. If you look around the racetrack here, there are a lot of people who depend on the horses, depend on the income – whether it's a Sunoco station around the corner where half the people who work here go and buy their snacks or the local community. When this place closes it's going impact more than horse racing in the state of Kentucky.”

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Kentucky Senate Passes Historical Horse Racing Bill; Legislation Moves To House Next

The Kentucky State Senate passed the Historical Horse Racing Bill, Senate Bill 120, by a margin of 22-15 on Tuesday, Feb. 9.

The Kentucky Equine Education Project (KEEP), Kentucky's equine economic advocate, released the following statement:

“We applaud the Senate for voting to keep historical horse racing in Kentucky and protect important jobs and investment in communities across the commonwealth. Senator John Schickel and Senate President Robert Stivers have been instrumental in moving this legislation forward, and we thank them for their efforts. Now, we are calling on our elected officials in the House to bring SB 120 to passage so that historical horse racing can continue in the commonwealth, just as it has for the last decade.

“The future of the horse industry and Kentucky's economy is in legislators' hands, and real jobs and livelihoods are at risk. Tens of thousands of Kentuckians rely on the equine industry to make a living and provide for their families—many of whom have already sent messages and made calls to their legislators asking them to vote yes on this critical legislation. They are your neighbors, family members, colleagues and friends. We hope that legislators will keep these individuals in mind as they discuss SB 120 in the coming days. A vote to keep historical horse racing in Kentucky is a vote for Kentucky families and the industry that supports them.”

The bill will be heard in the House Committee on Licensing, Occupations & Administrative Regulations before heading to the House floor for a vote.

The Kentucky Supreme Court issued a unanimous decision on historical horse racing machines on Sept. 24, 2020, deeming one particular brand to not constitute pari-mutuel wagering. When the Court declined to reconsider that decision in January, both Keeneland and Red Mile temporarily shut down historical racing operations.

Senator Schickel and Senate President Stivers introduced Senate Bill 120 on Feb. 2. It defines pari-mutuel wagering to be consistent with how the Kentucky Horse Racing Commission has regulated live racing for decades and historical horse racing for the last ten years. The legislation also reaffirms that only pari-mutuel wagering on simulcasts of live racing can occur at simulcast facilities. In effect, this maintains the status quo that Kentucky has known for the last decade, ensuring HHR venues can continue or resume operations.

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Senate Committee Will Hear Testimony Supporting Historical Horse Racing Bill Thursday

Today at 11 am EST, the Kentucky State Senate Committee on Licensing & Occupations will hear testimony in support of Senate Bill 120, legislation to keep historical horse racing in Kentucky.

The legislation was introduced earlier this week by Senator John Schickel and Senate President Robert Stivers and is backed by a broad coalition of horse industry, business, economic development and tourism organizations, including the Kentucky Equine Education Project (KEEP), which released a statement on the bill earlier this week.

SB 120 seeks to address a recent Supreme Court ruling by maintaining the status quo Kentucky has known for the past decade so that historical horse racing can continue in our state. HHR has led to significant job creation, community investment and economic development in communities across the commonwealth.

Testimony will be provided by:

  • Sen. John Schickel, bill sponsor
  • Kelli Pendleton, president/CEO, Christian County Chamber of Commerce
  • Tom Drury, horse trainer
  • Marc Guilfoil, Kentucky Horse Racing Commission

The committee will meet in Annex Room 171 in Frankfort and will be streamed live at ket.org/legislature.

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