Advocacy Center

Advocacy Center 2018-09-26T10:30:19+00:00

About NTRA Advocacy

The National Thoroughbred Racing Association uses political advocacy in Washington, D.C. to protect and grow the horse racing and breeding industries.

As a 501(c) (6) membership organization and trade association, the NTRA lobbies and raises Political Action Committee funds through Horse PAC® to help Federal candidates who understand our industry’s issues.

The Alpine Group, a Washington, D.C.-based lobbying firm, and the American Horse Council, representing more than 130 equine breeds, assist the NTRA in its advocacy efforts on behalf of the Thoroughbred industry.

Federal lobbying makes our industry more competitive.  The NTRA seeks tax legislation that benefits industry stakeholder groups such as horse owners, breeders, racetracks, advance deposit wagering service providers and horseplayers. As a trade association, the NTRA works proactively with other industry groups to address matters such as equine health and safety, unwanted horses, medication, horse identification and sales integrity.

2017

The U.S. Treasury Department and the Internal Revenue Service (IRS) announced in September that they would formally adopt modernized regulations regarding the withholding and reporting of pari-mutuel proceeds. The National Thoroughbred Racing Association (NTRA) had long pressed for these updated regulations that will allow horseplayers to keep more of their winnings, thereby increasing the amount wagered on U.S. pari-mutuel racing by as much as 10 percent annually, or upwards of $1 billion, according to independent estimates.

Under the new regulations, the IRS will consider the inclusion of a bettor’s entire investment in a single pari-mutuel pool when determining the amount reported or withheld for tax purposes, as opposed to only the amount wagered on the correct result.

For example, the amount wagered by a Pick Six player who hits with one of 140 combinations on a $1-minimum wager now will be $140, which is the total amount bet into the Pick Six pool. This more accurate calculation will remove the significant reporting and withholding obligations on horseplayers and the unnecessary paperwork for the IRS that was a result of the prior rule that used only  the $1 bet on the single winning combination as the amount wagered.

2015

Senior members of the Department of Treasury met with the NTRA and other industry participants to learn more about the horseplayer withholding issue, outlined in a 2014 letter to Treasury. Also in attendance was Rep. John Yarmuth (D-KY), who has been instrumental in building support for modernizing current withholding rules to better and more fairly represent today’s wagering menu.

Treasury Department officials indicated that action may be forthcoming as part of a review of IRS Form W2-G, used by taxpayers to report gambling winnings and any Federal income tax withheld on those winnings. In March 2015, the Treasury Department and Internal Revenue Service (IRS) issued a Notice of Proposed Rulemaking and Public Hearing (Notice) that opens the door to the possible addition of pari-mutuel gambling winnings to updated reporting and withholding requirements being developed for bingo, keno and slot machine players. NTRA continues to work with the Treasury Department as well as supporters on Capitol Hill to change the definition of a bet or a wager.

2014

Seventeen members of Congress joined in supporting a key initiative of the NTRA, a request that the IRS clarify its definition of the “cost of a wager” in determining whether a winning horse player is subject to IRS reporting and withholding. Horseplayers wagering on pari-mutuel races currently are subject to reporting of winnings of $600 or more and automatic Federal tax withholding on pari-mutuel winnings of $5,000 or more at odds of at least 300-1. The “cost of a wager,” now defined simply as the single winning bet the player makes (versus the total investment made), is at the center of these calculations, which frequently trigger reporting and/or withholding for horseplayers.  Withholding reduces players’ liquidity during handicapping and adversely impacts pari-mutuel handle and purses. Withholding levels for pari-mutuel winnings were last changed (from $1,000 to $5,000) in 1992. Reporting levels have not changed since the mid-1970s.

A provision that retroactively extended three-year tax depreciation for all racehorses was passed in December by the United States Senate as part of H.R. 5771, the Tax Increase Prevention Act of 2014. The House of Representatives also overwhelmingly passed H.R. 5771 to extend retroactively through the end of 2014 numerous provisions that expired or were reduced at the end of 2013. With the support of Senator Mitch McConnell (R-KY), the three-year depreciation schedule originally passed into law as part of the 2008 Farm Bill, giving the provision a five-year life span. In anticipation of the bill’s sunset, Rep. Andy Barr (R-KY) in 2013 introduced the provision in a standalone bill, the Race Horse Cost Recovery Act, which became part of H.R. 5771.

2009

Legislation that would eliminate the automatic 25 percent Federal withholding tax on pari-mutuel winnings of $5,000 or more if the odds are at least 300 times the amount wagered was introduced on April 28 by Rep. John Yarmuth (D-KY).   The “Pari-Mutuel Conformity and Equality Act of 2009” – or PACE Act (H.R. 2140) would end this unfair taxation of horseplayers.

2008

In May 2008, NTRA secured passage of legislation that was first introduced in the 109th Congress. The Equine Equity Act (EEA), part of the broader Farm Bill, allows for accelerated depreciation of racehorses from seven years (in most cases) to 36 months over four tax years. The EEA was effective January 1, 2009. Its initial application extends through the five-year term of the Farm Bill and may be renewed with the next Farm Bill (2012).

2006

After 10 years of attempts, Congress passed an Internet gaming bill that effectively banned the use of credit or other forms of payment for any type of online gaming except intrastate and tribal gaming and pari-mutuel wagering on horse racing, as authorized by the amended Interstate Horseracing Act (IHA).

2005

Legislation to provide horse owners and breeders significant tax benefits was introduced by Senator Mitch McConnell (R-KY). The Equine Equity Act (EEA), introduced as Senate Bill 1528, was later introduced in the House by Representative Ron Lewis (R-KY) as H.R. 4151. The EEA included changes in the depreciation schedule and capital gains holding period for racehorses, benefiting horse owners and breeders. These two tax components of the legislation failed to move during the 109th Congress; however, accelerated by the devastation of Hurricanes Katrina and Rita, horse breeders became eligible for Federal disaster assistance during droughts and other farm-related emergencies with a provision in the Agriculture Appropriations bill. This legislation was originally included in EEA and put horse breeders on equal terms with producers of most types of livestock with respect to disaster-assistance programs offered by the U.S. Department of Agriculture.

2004

International simulcasting received a boost when the NTRA secured passage of legislation to eliminate a 30% withholding tax on winnings by foreign nationals wagering into U.S. pools.  This allowed U.S. tracks to accept wagers from countries such as Canada, which previously had been forced to create their own wagering pools on U.S. racing. As of 2007, all racing jurisdictions are now offering co-pooled wagering with Canada.

2002

To promote and facilitate the accumulation of voluntary contributions from members of the NTRA for the support of political parties and candidates for elective office in the United States, the NTRA activated the Federal Political Action Committee (PAC) now known as Horse PAC.  It has become the nation’s largest gaming PAC in terms of annual contributions and is dedicated to the support of candidates who understand horseracing’s issues.

2000

Industry foresight led to an important amendment to the Interstate Horseracing Act (IHA).  Along with the American Horse Council, lobbyists and other industry organizations, the NTRA helped secure the IHA amendment that legalized pari-mutuel wagering on horse racing via the Internet. Years later, this move made the IHA a focal point of legislation designed to ban online wagering.

How can Federal lobbying help make our industry more competitive?

Primarily by seeking tax legislation that benefits industry stakeholder groups such as horse owners, breeders, racetracks, advance deposit wagering service providers and players but also by addressing select issues that directly impact the economics of racing, such as Internet wagering, immigration and matters that affect farmers, ranchers and other agricultural producers.

How does the NTRA lobby on Capitol Hill?

NTRA retains Washington, D.C.-based The Alpine Group to lobby on issues specific to pari-mutuel horse racing and breeding. The Alpine Group coordinates its efforts with the NTRA’s in-house legislative team and with the American Horse Council, a national association representing more than 160 equine breeds.

How is the Legislative Action Campaign funded?

The Legislative Action Campaign raises funds through three programs: the ¼% Sales Check-off, NTRA Foal Program and Horseplayers’ Coalition membership. For the former, buyers, sellers and consignors may support the Campaign by pledging ¼ of one percent on the price of their horses sold at Keeneland, Fasig-Tipton, Ocala Breeders’ Sales Company, Barretts, Breeders’ Sales Company of Louisiana and the Washington Thoroughbred Breeders and Owners Association. Every $1,000 in a horse’s sale price equals $2.50 to the Campaign. Individuals who choose not to participate in auction sales may pledge contributions through the NTRA Foal Program. Others may support the Campaign by joining the Horseplayers’ Coalition, a group whose objective is to seek legislative and regulatory solutions to tax and business issues that impact pari-mutuel racetracks and their customers.

How do I participate?

Sellers, consignors and designated agents may “pre-commit” their pledge on sales entry forms. Buyers, and sellers who miss the deadline for pre-commitments, can pledge until the close of the sale billing. Owners and breeders may contribute through the Foal Program by regular mail. Horseplayers and other individuals may become members of the Horseplayers’ Coalition by joining the National Horseplayers Championship (NHC) Tour.

Who is eligible to participate?

The Campaign’s supporting programs are open to participation by individuals, corporate entities (partnerships, farms, etc.), U.S. citizens and foreign nationals.

How much can I contribute?

There is no limit on the amount that can be contributed.

Use the links below to access current bills and legislation affecting the horse racing industry and to contact your Federal representatives in Congress.

Ask your representative to join the Congressional Horse Caucus. This bipartisan group was formed to educate members of the House of Representatives and their staffs about the importance of the horse industry in the economic, agricultural, sporting, gaming and recreational life of the nation.

Contact your U.S. Congressperson

Contact your U.S. Senator

Agriculture

H.R. 2

Agriculture Improvement Act of 2018

Introduced by: Rep. Mike Conaway (R-TX)

Legislative Action: According to the Library of Congress Summary, key changes in this bill include

  • Repealing the Conservation Stewardship Program and incorporate parts of the program into the Environmental Quality Incentives Program
  • Combine several trade programs into a single International Market Development Program
  • Increase the loan limits for guaranteed farm ownership and operating loans

Also refer to companion bill S. 3042 as this bill influences the content of H.R. 2.

Bill Referral: Referred to the House Committee on Agriculture, passed/agreed to in House, passed/agreed to in Senate with amendment. Conference held in September 2018.

Companion Bill: S. 3042

S. 3042

Agriculture Improvement Act of 2018

Introduced by: Sen. Pat Roberts (R-KS) for himself and Debbie Stabenow (D-MI)

Legislative Action: Promotes animal health initiatives such as a new National Animal Disaster Preparedness and Response program, the new National Animal Health Vaccine Bank, and support for the National Animal Health Laboratory Network. Also refer to companion bill H.R. 2 summary as this bill includes Senate amendments.

Bill Referral: Referred to Senate Committee on Agriculture, Nutrition, and Forestry, placed on Senate Legislative Calendar

Companion Bill: H.R. 2

 

 

Animal Welfare

H.R. 113

Safeguard American Food Exports Act of 2017

Introduced by: Rep. Vern Buchanan (R-FL)

Legislative Action: This bill amends the Federal Food, Drug, and Cosmetic Act to deem equine (horses and other members of the equidae family) parts to be an unsafe food additive or animal drug.

The bill prohibits the knowing sale or transport of equines or equine parts for human consumption.

Congress.gov Summary

Bill Referral: Referred to the House Subcommittee on Livestock and Foreign Agriculture and the House Subcommittee on Health

Companion Bill: S. 1706

S. 1706

SAFE Act

Introduced by: Sen. Robert Menendez (D-NJ)

Legislative Action: This bill amends the Federal Food, Drug, and Cosmetic Act to deem equine (horses and other members of the equidae family) parts to be an unsafe food additive or animal drug.

The bill prohibits the knowing sale or transport of equines or equine parts for human consumption.

Congress.gov Summary

Bill Referral: Introduced in Senate, no current referral

Companion Bill: H.R. 113

 

H.R. 2651

Horse Racing Integrity Act of 2017

Introduced by: Rep. Andy Barr (R-KY) and Rep. Paul Tonko (D-NY)

Legislative Action: This bill establishes the Horseracing Anti-Doping and Medication Control Authority as an independent non-profit corporation with responsibility for developing and administering an anti-doping and medication control program for: (1) Thoroughbred, Quarter, and Standardbred horses that participate in horse races that have a substantial relation to interstate commerce, (2) such horse races, and (3) the personnel engaged in the care, training, or racing of such horses.

The Federal Trade Commission (FTC) shall have exclusive jurisdiction over all horse racing anti-doping and medication control matters. The Authority and such FTC jurisdiction shall terminate if an interstate compact providing for services consistent with such program is established within five years after the program takes effect.

The Authority may enter into agreements with state racing commissions to implement the program within their jurisdictions.

Program elements shall include:

  • anti-doping and medication control rules,
  • lists of permitted and prohibited substances and methods,
  • a prohibition on the administration of any such substance within 24 hours of a horse’s next racing start, and
  • Testing and laboratory standards.

The Authority shall:

  • develop, maintain, and publish such lists;
  • establish a list of anti-doping and medication control rule violations applicable to either covered horses or persons;
  • establish standards and the process for laboratory accreditation and sample testing; and
  • Promulgate rules for anti-doping and medication control results management, for the disciplinary process for violation results management, and for imposing sanctions for violations.

The bill sets forth civil enforcement provisions.

Activities under this bill are funded by an assessment placed on state racing commissions based on the calculation of cost per racing starter.

Congress.gov Summary

Bill Referral: Referred to the House Subcommittee on Digital Commerce and Consumer Protection

H.R. 4040

Horse Transportation Safety Act of 2017

Introduced by: Rep. Steve Cohen (D-TN)

Legislative Action: This bill prohibits a person from transporting a horse in interstate commerce in a motor vehicle (except a vehicle operated exclusively on rail or rails) containing two or more levels stacked on top of one another.

The bill prescribes civil penalties for knowing violations of such prohibition.

Congress.gov Summary

Bill Referral: Referred to House Subcommittee on Highways and Transit

Immigration

H.R. 1627

Small Business Assistance Act of 2017

Introduced by: Rep. Jack Bergman (R-MI)

Legislative Action: This bill amends the Immigration and Nationality Act to exempt returning workers from the nonimmigrant H-2B visa (temporary nonagricultural services) annual numerical limitations through FY2017.

Congress.gov Summary

Bill Referral: Referred to House Subcommittee on Immigration and Border Security

Related bill: H.R. 4207

 

H.R. 4207

Small and Seasonal Business Relief Act

Introduced by: Rep. Jack Bergman (R-MI)

Legislative Action: This bill amends the Immigration and Nationality Act to exempt returning workers from the nonimmigrant H-2B visa (temporary nonagricultural services) annual numerical limitations: (1) through FY2018 for those individuals already counted toward such limitation in FY2016 or FY2017, and (2) during the next fiscal year for those individuals already counted toward such limitation in FY2018 or FY2019.

Congree.gov Summary

Bill Referral: Referred to House Subcommittee on Immigration and Border Security

Related Bill: H.R. 1627

 

Internet Gaming and Sports betting

Sports Betting

  • In addition to those states where sports betting was previously allowed, more states are beginning to look into allowing sports betting after the Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992 (PASPA)
  • Numerous states have legislation drafted or are considering legislation
  • New Jersey’s Monmouth Park launched sports betting in June 2018. Delaware, Mississippi, Nevada, New Jersey and West Virginia also offer full-scale legalized sports betting as of September 2018.

Sports Betting Bill Tracker State-by-State

 

H.R. 783

Sports Gaming opportunity Act of 2017

Introduced by: Rep. Frank LoBiondo

Legislative Action: A bill that amends the federal judicial code to exempt a lottery, sweepstakes, or other betting, gambling, or wagering scheme authorized by a state by a statute enacted on or after January 1, 2017, and in effect not later than January 1, 2021, from the prohibition against a governmental entity, or a person acting pursuant to the law or compact of a governmental entity, sponsoring, operating, advertising, or promoting sports gambling.

Congress.gov Summary

Bill Referral: Referred to House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations

 

Interstate Commerce

H.R. 4879

Protect Interstate Commerce Act of 2018

Introduced by: Rep. Steve King (R-IA)

Legislative Action: This bill prohibits a state or local government from imposing a standard or condition on the production or manufacture of agricultural products sold or offered for sale in interstate commerce if: (1) the production or manufacture occurs in another state, and (2) the standard or condition adds to standards or conditions applicable under federal law and the laws of the state or locality in which the production or manufacture occurs.

The bill also allows private rights of action to challenge state or local regulations relating to agricultural goods sold in interstate commerce.

Congress.gov Summary

Bill Referral: Referred to the House Subcommittee on the Constitution and Civil Justice and the House Subcommittee on Livestock and Foreign Agriculture

Related Bills: H.R. 2 and H.R. 3599

Racehorse Depreciation

H.R. 1892

Bipartisan Budget Act of 2018

Introduced by: Rep. John Larson (D-CT)

Legislative Action: Regarding racehorses, this bill retroactively covers 2017 to allow uniform and accelerated depreciation over a three-year period for thoroughbred racehorses. The provision previously expired at the end of 2016. New provisions included in the new tax law (effective Jan. 1, 2018), such as full and immediate expensing, are designed to replace the depreciation rules.

Bill Referral: Became law in February 2018.

 

Taxation

H.R. 1

An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018

Introduced by: Rep. Kevin Brady (R-TX)

Legislative Action: The impact of this legislation will be felt by all industry sectors. While tax provisions outlined below are generally favorable to the industry, every participant in racing will be impacted differently:

  • Permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%.
  • Temporary (through 2025) reduction in the top individual income tax rate from 39.6% to 37%, and revision of the other individual income tax rates and brackets.
  • Doubling of the standard deduction; elimination of personal exemptions; imposition of new limits on the deduction for state and local taxes, mortgage interest, and personal casualty losses. Other personal itemized deductions, including unreimbursed business expenses, are eliminate.
  • Retention of the current 40% estate tax with a doubling of the estate and gift tax exemptions from $5,600,000 to $11,200,000 per person.
  • Repeal of the corporate alternative minimum tax (AMT) and modification of the individual AMT with higher exemption amounts and phase-out thresholds.
  • Inclusion of a new, temporary, 20% deduction for certain pass-through business income. This deduction will sunset at the end of 2025.
  • Increase in immediate expensing to 100% and expansion of the definition of “new property.” Purchasers would be able to write off 100% of all horses purchased, including yearlings and breeding stock, as long as the asset purchased has not been previously owned by the purchaser. The 100% rate applies to new and used property acquired and put into service after Sept. 27, 2017 and before Jan. 1, 2023. Prior rules provided for 50% depreciation on new property only. Beginning with 2023, the 100% depreciation rate will be phased out by 20% each year until fully phased out after 2027.
  • Increase in the Section 179 limit to $1 million from $500,000, and an increase in the cost of property subject to the phase-out to $2.5 million from $2 million, which would be beneficial to industry participants that generate net taxable income. Both the maximum deduction and phase-out amount are permanently extended and will be indexed for inflation.
  • Machinery and equipment used in farming operations will be granted accelerated depreciation with a useful life of only five years and depreciation using the 200% declining balance method. The prior rules provided for a useful life of seven years and depreciation using the 150% declining balance method.
  • Expanded cash method of accounting available for those with gross receipts less than $25 million, an increase from the current $5 million level.
  • Limitation of the applicability of the gain deferral rules to only like-kind exchanges of real property not tangible personal property.
  • Limitation on the deduction for business interest expenses to 30% of adjusted taxable income.
  • Elimination of the deduction for entertainment, amusement or recreation expenses.

For horseplayers, the NTRA successfully worked to defeat a proposed amendment to the tax bill that would have eliminated the itemized miscellaneous deduction for gambling losses. Consequently, horseplayers will continue to be allowed to deduct their losses from wagering transactions (i.e. losing ticket) up to the amount of winnings. However, beginning January 1 , 2018, through December 31, 2025, the limitation on losses from wagering transactions (up to the amount of winnings) will apply not only to the actual costs of wagers incurred by individual, but also to other deductible expenses such as travel and lodging incurred by the individual in connection with the conduct of that individual’s gambling activity.

Bill Referral: Became law in December 2017

Companion Bill: S. 1

 S. 1

An original bill to provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2018

Introduced by: Sen. Michael Enzi (R-WY)

Legislative Action: Refer to companion bill H.R. 1 summary.

Bill Referral: Senate Committee on the Budget

Companion Bill: H.R. 1

H.R. 1805

Equine Tax Parity Act of 2017

Introduced by: Rep. Andy Barr (R-KY)

Legislative Action: This bill amends the Internal Revenue Code, with respect to the preferential tax treatment of gains and losses from the sale of depreciable property used in a trade or business, to eliminate “horses” from the definition of “livestock” (thus making the 24-month holding period requirement for livestock inapplicable to horses and allowing horses to be treated as capital assets subject to the existing 1-year holding period requirement).

Congress.gov Summary

Bill Referral: Referred to the House Committee on Ways and Means

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