Contact: Peggy Hendershot (859) 621-6929
A bill was introduced in the U.S. House of Representatives yesterday that would eliminate the automatic 25 percent federal withholding on pari-mutuel winnings of $5,000 or more for bets that carry odds of 300-1 or higher. The "Pari-Mutuel Conformity and Equality Act of 2008" (H.R. 6631) is sponsored by Rep. Charles W. Boustany, Jr. (R-LA).
Unlike any of its competitors in other gaming industries, the pari-mutuel industry is burdened by an inequitable tax law that requires wagering facilities to withhold federal taxes on winnings over $5,000 if the odds are at least 300 times the amount wagered. The withholding threshold has remained unchanged for 16 years and was last increased in 1992, from $1,000 to $5,000.
Since then, exotic wagering (bets involving high odds and high potential returns) has grown tremendously in the U.S., now accounting for two-thirds of all pari-mutuel wagers placed.
"The negative impact of withholding is multi-faceted," said Peggy Hendershot, the NTRA's Senior Vice President of Legislative Affairs. "For the betting public, it has meant a confiscatory and frequently unfair loss of available capital. That loss of reinvestment or 'churn' leads to a reduction in overall wagering that in turn means less revenue generated for state governments, racetracks, and purse money for horsemen.
"Our industry and our fans applaud Congressman Boustany for introducing this important legislation, and we look forward to working with our new Horseplayers' Coalition to add support to this initiative," Hendershot added.
The NTRA is a broad-based coalition of horse racing interests consisting of leading thoroughbred racetracks, owners, breeders, trainers and affiliated horse racing associations, charged with increasing the popularity of horse racing and improving economic conditions for industry participants. The NTRA has offices in Lexington, Ky., and New York. NTRA press releases appear on the NTRA web site, NTRA.com.
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