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From YouTube: Pari-Mutuel Wagering Taxation Task Force (7-16-21)
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A
Welcome
everybody
we're
gonna,
get
started
with
this
first
meeting
of
the
paramutual
wagering
task
force
appreciate
everyone's
attendance.
We've
got
several
people
here
in
the
audience,
which
is
nice
to
see
I'm
hearing
feedback
on
myself,
which
is
never
good.
One
of
me,
is
more
than
enough,
so
we're
gonna
wait
until
that
disappears.
Before
we
get
rolling
for
members
of
the
committee,
we
are
getting
copies
made
of
the
of
the
powerpoint
for
everyone
to
have
and
scribble
on.
A
A
A
B
A
Here
in
the
room
believe
we
have
a
quorum.
I
would
like
to
first
of
all
mention
that
representative
gentry
is
not
with
us
as
he
is
currently
celebrating
his
25th
anniversary.
I
believe-
and
I
believe
that
anniversary
is
literally
today,
so
congratulations
to
you
and
mrs
gentry,
who
deserves
special
recognition
for
all
that
there
there
she
is
that
very
good.
Before
we
get
started.
I
would
like
to
yield
to
co-chair
leader
thayer
for
a
few
comments.
D
Thank
you,
mr
chairman.
First
of
all
I
want
to
welcome
senator
schickel,
chairman
of
the
senate,
licensing
and
occupations
committee
he's
not
a
member
of
this
task
force,
but
I
certainly
appreciate
the
fact
that
he
cares
enough
about
the
horse
industry
to
join
us
today.
So
thank
you,
chairman
schickel.
D
Second
of
all,
I'd
be
remiss
if
I
didn't
mention
the
tragic
passing
of
senator
tom
buford.
Last
week,
his
unexpected
death
has
left
us
all.
Gutted
is
the
best
way
to
describe
it.
It
was
a
jarring
event
and
I
do
know
in
terms
of
horse
racing
that
senator
buford
was
a
big
fan
of
the
industry,
always
supportive
of
the
industry.
D
As
a
matter
of
fact,
the
last
significant
time
I
spent
with
him,
mr
chairman,
was
when
the
licensing
and
occupation
committee
was
at
was
at
keeneland
in
april,
and
he
sat
at
my
table
and
he
was
most
excited
when
we
went
down
to
the
paddock
and
met
with
hall
of
fame,
jockey
johnny
velasquez,
and
I
remember
how
excited
a
few
weeks
later
when
johnny
won
the
kentucky
derby
and
tom
got
to
talk
about
how
he
he
he
met.
D
One
of
the
greatest
jockeys
ever
tom
has
been
a
member
of
the
senate
since
1990
the
longest-serving
republican
member
of
the
senate
and
the
the
second
longest
serving
next
to
senator
neal.
Overall,
it's
going
to
be
it's
going
to
be
a
real
real
set
of
big
shoes
to
fill,
whoever
replaces
them
in
a
special
election
and
for
our
caucus,
especially
when
we
return
in
january.
Without
him
it's
going
to
be
really
hard
to
take.
So
I
I
wanted
to
mention
that
he
he
wouldn't
want
me
to
dwell
on
it.
D
D
I'm
just
so
I'm
just
going
to
take
your
lead.
Mr
chairman,
you
have
a
lot
of
practice
chairing
things
these
days,
so
I'm
honored
to
co-chair
this
task
force
with
you
and
and
for
the
record.
D
I'm
not
a
big
fan
of
task
forces
never
have
been
chaired
one
once
before
made
a
set
of
recommendations
that
I
think
is
currently
being
used
as
a
door
stop
in
one
of
the
lrc
offices
down
in
the
basement
and-
and
I
I'm
also
a
big
believer
in
the
interim
committee
process
and
but
from
time
to
time
there
are.
There
are
issues
that
come
along
that
do
deserve
a
deeper
dive.
D
If
you
will-
and
this
appears
to
be
one
of
them,
the
paramutual
tax
code
in
kentucky
is
pretty
complicated
and
I
I
probably
have
a
little
more
knowledge
of
it
than
most,
because
I
used
to
work
at
turfway
park,
and
so
you
know
had
to
deal
with
the
the
financials
every
day
and
you
know
see
where
the
the
money
comes
from
and
the
tax
paid
on
it
and
and
it's
it's
still
pretty
complicated
to
follow.
D
So
I'm
looking
forward
to
today's
testimony
from
racing,
commission
and
lrc
staff
to
to
start
explaining
to
everybody
how
this
really
works
and
it
may
be
complicated,
but
I
will
say
this:
it's
working
pretty
well
and
I
don't
think
it's
a
foregone
conclusion
that
that
we
we
make
changes.
D
I
I'm
pretty
pretty
pleased
with
the
way
it's
going
right
now.
The
industry
is
on
an
ascendancy
in
kentucky
and
and
I
believe,
with
the
passage
of
the
hhr
bill
and
the
eventual
opening
of
the
new
turf
way
facility
in
senator
schickel's
district,
we're
probably
18
to
24
months
away
from
having
the
best
year-round
purses
in
america
and
everyone
needs
to
understand.
Purses
are
what
make
horse
racing
go.
D
D
D
I
don't
want
that
for
kentucky
and
we
need
to
be
very
careful
as
we
look
at
this
tax
code
to
make
sure
that
we
don't
make
any
changes
that
makes
it
difficult
for
investment
to
occur
and
jobs
to
be
created.
We
in
the
next
meeting
we're
going
to
learn
about
the
full
economic
impact
of
this
industry,
but
I'll
just
tell
you
right
off
the
top.
D
A
Thank
you
and
let
me
just
add
quickly
about
senator
buford.
First
of
all,
it's
about
the
funniest
guy
you'd
ever
want
to
meet
in
life,
which
is
great
and
secondly,
over
30
years
in
the
legislature.
A
I
know
that's
something
that
nowadays
is
frowned
upon,
but
I
think
it's
something
that
deserves
to
be
recognized
and
honored
and
appreciated,
because
I'm
pretty
sure
that
I
believe
senator
buford
had
a
a
very
successful
life
in
the
private
sector
that
probably
could
have
been
more
successful.
Had
he
not
decided
to
serve
his
community
here
in
the
legislature.
So
I
want
to
thank
him
and
we
extend
those
thanks
for
his
to
his
wife
and
his
family
for
sharing
him
with
us.
A
So
now
to
the
topic
at
hand,
I
appreciate
all
of
you
coming
here
today
and
in
a
moment
we'll
have
you
introduce
yourselves,
but
the
goal
of
today
is
to
kind
of
get
everybody
on
the
same
page
as
to
where
the
taxes
are,
what
taxes
are
wagered,
how
they're
wagered
on
the
different.
A
Types
of
bets,
as
well
as
where
the
money
comes
from,
so
we
appreciate
everyone
coming
today,
if
you
all
would
introduce
yourself
for
the
record
and
we'll
get
started
and
I
think
we'll
take
regular
breaks
along
the
way,
so
that
folks
can
ask
questions
in
within
each
section
of
the
program.
So
please
go
right
ahead.
E
Okay,
I
will
proceed
with
an
overview
of
the
peer
mutual
tax
and
on
this
first
slide,
I
just
wanted
to
take
a
moment
before
we
really
dig
down
deep
into
the
paramutual
tax
to
explain
that
the
racing
industry,
in
addition
to
paying
income
tax
on
their
net
income,
just
like
any
other
business,
in
addition
to
paying
property
tax
on
their
real
and
tangible
property,
just
like
any
other
business,
in
addition
to
paying
sales
tax
on
the
consumption
of
tangible
personal
property,
just
like
any
other
business,
they're
also
required
to
pay
three
additional
taxes
or
fees,
and
this
first
slide
points
out
those
three
additional
taxes.
E
So,
let's
look
in
columnar
format
here,
at
the
first
column,
the
license
fee.
This
is
a
regulated
industry
and
as
a
regulated
industry,
they
are
licensed
and
the
license
fee
is
paid
to
the
into
the
general
fund
for
the
any
person
engaged
in
the
business
of
conducting
a
race
meeting.
D
E
You
can
see
here
we
have
presented
from
the
office
of
state
budget
directors,
so
these
are
official
general
fund
receipt
data
for
fiscal
year
17
through
the
current
fiscal
year.
Let
me
explain
that
we
only
have
11
months
of
data
for
the
current
fiscal
year.
That
june
closeout
is
still
ongoing
right
now,
hopefully,
by
the
end
of
the
month,
we
would
have
that
total
for
this
fiscal
year,
but
you
can
see
somewhere
in
the
neighborhood
of
250.
E
I
do
want
to
point
out
and
as
a
reminder,
that
fiscal
year
20
is
not
a
normal
year
for
the
racing
industry,
because
the
tracks
were
shuttered
for
more
than
two
months
of
the
fiscal
year,
and
so
that's
why
you
see
a
little
bit
of
a
reduction
there
from
from
the
trend,
the
previous
trend
there,
and
that
holds
true.
You
know
throughout
all
these
receipt
categories
that
we'll
be
discussing
so
there
that's
the
license
fee,
pretty
simple.
E
E
I
recently
had
a
question
asked
about
well:
some
of
these
racetracks
are
no
longer
charging
in
admission
and
the
assumption,
I
think,
was
made
that.
Well.
If
there
is
no
emission
charge,
then
there
would
be
no
tax.
That
would
be
due
and
that's
an
incorrect
assumption.
E
E
A
few
years
back
with
the
department
is
that
those
returns
if
they're
filed
and
the
tax
is
paid,
there's
not
a
lot
of
compliance
effort.
There
is.
There
have
been
no
field
audits
that
I'm
aware
of
in
in
the
history
related
to
the
admission
tax,
so
as
long
as
the
industry
is
filing
the
return
and
paying
the
tax
show
due
on
that
return,
I
don't
think
that
there
will
be
a
problem
with
the
department
of
revenue
how
the
industry's
actually
calculating
that.
E
I
I
can't
answer
that
so
so
one
area
that
you
might
consider,
as
as
we
look
at
this
industry
as
a
whole,
now
moving
to
the
third
tax,
which
is
the
parametric
tax
and
is
the
meat
of
of
this
discussion
today.
E
You'll
see
that
all
tracks
conducting
pair
mutual
wagering
are
required
to
pay
the
peer
mutual
tax
and
that
wagering
can
be
on
live
racing,
historical
horse,
races,
inner
track
and
simulcast
racing
or
advanced
deposit
account.
Wagering
and
the
rate
of
taxation
varies
as
you
move
from
the
type
of
wager
live.
Racing
can
be
from
three
and
a
half
to,
or
one
and
a
half
percent
historical
horse
races
are
taxed
at
one
and
a
half
percent
inner
track
and
simulcast
racing
at
three
percent
and
advanced
deposit
wagering
at
one
half
of
one
percent.
E
These.
These
receipts
are
reported
weekly
with
no
later
than
five
days
following
that
race
week,
and
you
can
see
there
at
the
bottom.
Once
again,
the
official
general
fund
receipts
from
the
office
of
state
budget
director
show
that
the
payment
pair
mutual
tax
over
these
fiscal
years
have
been
increasing
6.8
million
up
to
27.7
million
for
our
incomplete
fiscal
year
that
we're
currently
in.
A
Under
the
res,
the
the
license
fee,
I
understand
that
you're
getting
numbers
from
the
executive
branch
according
to
the
list,
every
every
fee
ends
in
a
five
or
a
zero.
Yet
there
are
receipts
that
end
in
seven
and
six
and
one
do.
We
know
why
that
is.
E
I
can
ask
that
question.
It
might
be
that
there
were
errors
and
interest
in
penalty
and
okay.
A
Of
their
ability
to
regulate.
C
Mcdaniel.
Thank
you.
Mr
chairman.
I've
got
two
jennifer
over
on
the
license
fees
side.
What
is
the
statutory
definition
of
a
daily
mutual
handle.
E
Yeah
cliff
so
handel
if
you're
not
familiar
with
that
term,
is
the
amount
of
money
wagered,
and
so
you
would
look
at
every
daily
race
day
and
make
that
average
across
those
race
days
to
determine
that
daily
mutual
handle.
E
C
C
D
There
are
no
turnstiles
at
turfway
park,
red
mile,
alice
park
or
kentucky
downs.
I
haven't
been
to
oak
grove
yet,
but
I
doubt
there
are
turnstiles
there.
All
those
places
have
free
admission,
so
the
the
tax
that's
collected
on
the
admission
tax.
It
basically
comes
from
keeneland
and
churchill,
downs,
which
still
charge
admission
for
for
tickets
to
get
in
and
and
most
of
it
I
would,
I
would
believe,
is
generated
on
kentucky
oaks
and
kentucky
derby
day.
D
So
I
I
do
think
one
thing
we
ought
to
look
at
cleaning
up
is:
if
a
track
charge
is
free
admission.
We
we
should
probably
take
it
out
of
statute
that
they
have
to
pay
15
cents,
because
they're
not
collecting
the
admission.
If
they're,
not
collecting
commission,
why
are
we
charging
them
a
phantom
tax?
D
It
was
after
there
was
a
positive
court
case
relating
to
hhr
and
also
no
track
pays
the
three
and
a
half
percent
rate
on
the
paramutual
tax,
because
that
is
that
is
based
on
live
on
track,
handle
and
it's
bifurcated
and
you
have
to
average,
I
think
1.2
million
a
day
and
live
handle.
D
E
Okay,
the
next
slide
shows
you
our
licensed
association,
so
at
the
top
box
here
on
this
slide,
we
show
you
know:
churchill
downs
ellis
park,
the
entire
list,
the
breed
that
is
raced
at
that
racetrack
is
important.
E
You'll
see
that
as
we
continue
our
discussion
on
another
slide,
but
we
have
five
thoroughbred
tracks
and
three
standard
bread
tracks
and
then
we've,
given
you
a
chart
to
show
you
that
live
racing,
simulcasts
and
historical
horse
racing
are
are
all
types
of
wagers
that
can
be
made
at
any
one
of
the
tracks,
and
they
are
the
only
place
that
these
wagers
can
be
made
other
than
your
advanced
deposit
account.
Wagering
that
we're
going
to
talk
about
in
a
minute
so
live
wagering
is
is
just
like.
E
It
sounds
you're
sitting
there
at
the
track,
you're
watching
the
horses
in
person
right
there
at
the
track
and
you're
making
wagers
at
the
windows
right
there
at
the
track,
live
wagers,
inner
track
and
simulcast
wagering
is
accepted.
The
wagers
are
accepted
at
every
at
every
track,
and
that
is
where
you're
you're
at
the
track,
or
you
call
into
the
track,
but
you're
actually
watching
a
a
race
through
video
or
or
a
live
race.
It's
it's
ongoing
right
there,
as
as
it
is
as
you're
wagering.
E
You
might
watch
it
on
your
phone.
Senator
harris
is
saying,
but
yes,
you're
watching
it
and
you're
making
your
wager,
just
as
you
would
a
live
race,
but
you're
not
physically,
where
the
race
is
occurring
and
so
you're
making
that
wager
in
advance
of
the
race
and
then
watching
it
through
a
video
mechanism
on
your
phone
on
a
monitor
there
at
the
track
that
type
of
thing
and
then
finally,
we
have
historical
horse
racing
and
this
technique
is,
you
might
hear
this
called
instant
racing
in
other
states.
E
Kentucky
statute
uses
historical
horse
racing,
and
this
allows
wagers
to
be
made
on
replays
of
horse
races,
so
it
it
was
a
race.
There
is
a
video
of
that
and
by
wagering
through
a
machine
you
make
your
deposit
into
a
machine
and
the
race
is
randomly
selected
through
the
mechanisms
of
the
machine
and
the
identification
of
the
race,
the
jockeys,
the
name
of
the
race,
the
location
of
the
race.
Everything
is
is
not
told.
E
So
there's
there's
no
way
that
you
could
have
watched
this
race
and
then
bet
on
this
race
and-
and
you
know,
win
because
you've
seen
this
race
before.
But
there
is
limited
handicapping
information
that
is
available
or
you
can
allow
the
the
mechanism
to
select
your
race
selection
automatically,
and
so
the
industry
would
say
that's
a
very
novice
explanation
and
and
that's
true,
but
if
you
start
digging
much
deeper
into
how
the
machine
works,
they
will
tell
you
that
that's
proprietary
information
and
is
is
very
guarded.
E
So
that's
historical
horse
racing,
so
you'll
notice
that,
on
the
slide
here
we
have
some
footnotes
that
churchill
downs
is
actu.
Historical
horse
racing
is
offered
through
derby
city
gaming,
which
is
a
part
of
the
licensed
premises
of
churchill.
Downs,
keeneland
and
red
mile
operate
historical
horse
racing
through
a
joint
venture
and
then
finally,
newport
racing
and
gaming
is
a
non-contiguous
track
facility
that
is
associated
with
turfway
park
and
then
corbin
horse
track.
E
They've
just
been
licensed
and
it's
my
understanding
that
they
are
actually
have
race
meeting
days
currently
ongoing
on
the
weekends
there
at
the
red
mile,
but
historical
horse
racing
will
be
offered
at
that
association's
license
premise
in
the
future,
then
we
move
to
advanced
deposit
account
wagering
and
as
of
may
21st,
these
are
the
providers
that
we
currently
have
licensed
here
in
the
state,
with
twin
spires
and
tvg
being
the
top
two
as
far
as
volume
of
wagers
made
through
those
websites,
and
that
is
a
website
or
an
app
where
you
can
set
up
an
account
deposit
money
into
that
account
and
then
make
wagers
from
that
account
on
specific
races.
E
So
that
sounds
real
simple.
But
what
happens
if
you
are
at
the
track?
You're
watching
a
race
in
person,
and
you
make
a
wager
by
using
the
app
on
your
phone.
That's
no
longer
a
live
race.
Wager
that
becomes
an
adw
wager
and
so,
depending
on
the
technology
and
the
way
that
you
make
your
bet
determines
how
the
paramutual
tax
is
reported
through
the
industry.
E
Okay,
apologize
for
all
the
information
on
this
slide.
It's
it's
very
small,
but
very
important
as
well
central.
There
kind
of
stole
my
thunder
there
a
few
minutes
ago
when
he
talked
about
the
grade
boxes
that
you
see
here
for
live
wagers.
E
So,
let's
think
about
a
live
wager
and
the
amount
of
average
daily
daily
average
live
handle,
and
he
is
absolutely
correct
that
the
statute
provides
that
if
a
track
is
has
the
daily
average
live,
handle
of
1.2
million
or
more
then
the
rate,
the
parameter
rate
is
three
and
a
half
percent.
E
There
has
not
been
a
track
to
reach
that
lev
level
of
1.2
million
since
2008
fiscal
year,
2008.,
so
in
effect,
and
the
reason
why
these
are
grayed
out
that
3.5
percent
rate
is
really
no
longer
applicable
here
in
kentucky,
there's
no
track
that
is
meeting
that
live,
handle
in
that
type
of
volume.
So
let's
just
ignore
the
gray
box.
While
it
is
statutory
language,
there's
there's
it's
really
not
applicable.
E
We
we
move
down
the
line,
then
for
a
thoroughbred
track.
One
and
a
half
percent
is
paid
with
0.75
of
that
total
tax
being
distributed
to
for
a
thoroughbred
track.
It
would
be
distributed
to
the
thoroughbred
thoroughbred
development
fund.
E
That's
a
fund
that
the
kentucky
horse
racing
commission
has
administrative
jurisdiction
over
to
to
spend
from
that
fund
and
monies.
There
are
used
to
promote,
enhance,
improve
and
encourage
the
further
and
continued
development
of
thoroughbred
breeding
industry
here
in
kentucky,
and
that's
primarily
done
through
providing
for
supplemental
purses.
E
So
that
is
how
the
the
purses
are
increased
and
and
on
that
ascending
rate,
that
senator
thares
talked
about
senator
thayer
talked
about
going
straight
down
that
column.
Continuing
on
0.2
percent
is
deposited
into
the
equine
industry
program.
E
E
Continuing
down,
0.1
percent
is
deposited
into
the
higher
education
equine
fund,
and
this
fund
is
administratively
controlled
by
the
council
on
post-secondary.
Higher
education
and
monies
are
to
be
used
for
the
construction,
expansion
or
renovation
of
facilities
or
the
purchase
of
equipment
for
the
equine
programs.
At
the
five
universities
across
state
universities
across
the
state
and
historically
monies
there
have
been
used
to
purchase
livestock
renovation
to
barns,
paddocks
the
purchase
of
tax
supplies,
fencing
for
rotational
grazing
around
the
barns
and
then
student
lab
demonstration
products.
E
There
are
other
smaller
items,
but,
historically
speaking,
that's
the
way
the
money
has
been
used
by
cpe
and
then
one
more
distribution
fund
and
that's
equine
drug
testing,
and
this
is
for
the
use
of
the
horse
racing
commission
to
support
the
drug
testing
that
that
goes
on.
You
know
at
the
tracks,
so
when
you
start
with
a
1.5
rate
and
you
subtract,
0.75
percent
for
the
development
fund
point
two
percent
point.
One
percent
point:
one
percent
all
the
way
down,
then
what
is
left
for
general
fund
purposes
is
point
three.
E
E
The
the
rate
is
the
same
1.5
percent,
but
the
development
fund
is
where
the
difference
occurs
and
the
development
fund
here
would
not
be
the
thoroughbred,
but
the
standard,
bread
development
fund
and
one
percent
of
all
money
wagered
is
then
distributed
to
that
fund
instead,
so
very
very
same
usage
to
develop
and
promote
races
and
to
provide
purses
for
those
races
for
standard
bred
races.
E
We're
going
to
move
on
to
historical
horse
racing,
okay,
so
historical
course
rate
race,
wagers
or
hhr.
We
still
have
the
thoroughbred
designation,
the
standard
bread
designation
very
similar
to
a
live
wager
from
a
thoroughbred
track
or
a
standard
track.
The
tax
rate
is
the
same.
1.5
percent.
E
E
E
In
any
fiscal
year,
so
as
those
monies
come
in
from
historical
horse,
race,
wagers
distributions
occur
to
the
equine
industry
fund
at
600
up
until
650
000
and
then
the
remainder
then
flows
to
the
general
fund
instead
very
same
thing,
for
higher
education
and
equine
drug
testing,
except
that
those
two
funds
are
capped
at
320
000
per
fiscal
year
instead
of
the
650.
E
so
320
to
higher
education,
equine
fund
and
320
000
to
the
equine
drug
testing
fund.
So
it's
it's
not
as
clean
and
clear
to
determine
how
much
money
is
actually
deposited
into
the
general
fund
from
historical
horse,
race
wagers.
E
But
over
time
we've
looked
at
this
back
to
2017
and
over
time
it
has
ranged
between
0.57
percent
and
0.67
percent
of
the
amount
of
money
wagered
through
historical
horse.
Races
actually
is
deposited
into
the
general
fund
and
as
historical
you'll
see
as
we
talk
about
the
data
below
as
historical
horse.
Racing
continues
to
increase,
as
it
has
in
the
the
past
few
years
that
0.67
that
we're
currently
at
will
inch
up
just
slightly
as
historical
horse.
E
Race
wagers
continue
to
be
made
because
more
and
more
funds
with
these
limited
amounts
going
to
these
three
funds.
More
and
more
funds
will
flow
to
the
general
fund,
as
that
increases
and
we've
collected
data
on
total
handle
the
distribution
to
the
thoroughbreds
standard,
bread,
the
equine
industry
fund,
higher
education,
equine
fund
equine
drug
testing
fund
and
then
the
amount
of
tax
to
the
general
fund.
And
let
me
caution
you
here.
These
are
numbers
that
come
from
the
kentucky
horse
racing
commission
reports.
E
These
will
not
directly
line
up
with
general
fund
receipt
reports
because
the
the
the
timing
of
the
reports
relate
for
horse
racing
is
related
to
the
race
meeting
dates
and
for
general
fund
purposes.
Of
course,
that's
the
receipt
and
deposit
of
the
funds
into
the
general
fund,
so
there's
a
little
bit
of
timing
and
mismatch
between
the
numbers,
but
the
department
of
revenue
does
not
break
down
per
mutual
wagering
tax
information
to
the
degree
that
the
horse
racing
commission
does
so
that's.
Why
we're
using
their
data?
And
thank
you
very
much
for
that
data.
E
So
you
can
see
total
handle
the
amount
of
money
wagered
in
fiscal
year,
17
all
the
way
over
on
the
right
hand,
side
of
that
bottom
chart
for
live
racing.
It
was
110
million
and
for
historical
horse
racing
it
was
920
million
moving
forward
in
time
to
the
current
date,
remembering
again
that
this
is
only
11
months
of
the
current
fiscal
year
we
have
46.1
million
of
total
handle
in
live
racing
and
4.1
billion
total
handle
for
historical
horse
racing
and
then,
of
course,
the
corresponding
calculations
of
the
distribution.
C
Mr
chairman,
just
whenever
you
open
them
to
them,
but
is,
is
there
a
any
type
of
statutory
control
on
the
payout
on
the
hhr
machines
like
x,
amount
has
to
go
to
the
better
or
anything
like
that.
A
B
If
I
may,
the
commission
is
capped
for
the
different
types
of
wager,
so
a
straight
wager
would
be
capped
at
a
certain
percentage.
An
exotic
wager,
which
is
what
hhr
falls
under,
is
capped.
It's
important
to
note
that
the
total
handle
is
not
the
revenue.
That's
just
a
total
handle
wagered
for
hhr.
I
don't
know
if
you
have
the
commission
rate
for
hhr,
but
historically
it's
been
about
nine
percent,
that
that
should
be
considered
the
revenue.
A
A
A
So
if,
if,
if
the
machine
I'm
playing
is
basically
trying
to
you
know
I'm
trying
to
hit
a
trifecta
or
something
is
that's
the
same
as
if
I
try
to
hit
a
trifecta
on
derby
day
at
churchill,
downs
right.
A
A
A
A
C
Real
quick
is
there
any
statutory
language
that
requires
any
of
this
revenue
to
go
to
problem
game
problem
gambling
and
it's
just
no
statute,
no
reg,
no
okay,.
A
D
There
thank
you,
mr
chairman,
I'm
going
to
follow
up
on
something
mikasa
said
before
everybody
goes
getting
the
big
eye
when
they
see
these
numbers
and
thinking
that
all
you
know,
4.1
billion
is,
is
revenue.
That's
the
amount
wagered
and
depending
on
the
type
of
bet,
80
to
90
percent
of
every
dollar.
Wagered
goes
back
to
pay.
D
The
winning
betters
paramutual
is
french
for
betting
amongst
ourselves,
so,
unlike
in
casino
gambling,
where
you're
playing
against
the
house
at
a
racetrack
and
a
paramutual
bet
you're
playing
against
the
person
next
to
you
and
if
you
lose
the
person
next
to
you
wins
your
money.
So
it's
important
to
remember
that
these
are
not
revenue
numbers.
D
The
amount
wagered
are
that
that
is
not
revenue
80
to
90
and
we'll
get
into
that
breakdown
in
future
meetings
pays
winning
bettors
and
then
the
remainder
is
where
the
taxes
come
from,
where
the
purses
come
from,
where
the
tracks
operating
and
brick
and
mortar
costs
come
from
and,
of
course,
where
their
profit
comes
from.
E
Okay,
before
we
move
away
from
historical
horse
race,
there's
one
issue
that
staff
lrc
staff
is
aware
of,
and
that
is
there
are
currently
agreements
between
the
thoroughbred
and
standard
tracks
related
to
the
distribution
to
those
funds,
because
the
statute
contemplates
that
a
thoroughbred
track
would
be
involved
in
historical
horse
racing,
and
not
this
joint
venture
like
we
have
between
kentucky
keeneland,
a
thoroughbred
track
and
red
mile
a
standard
track.
E
So
the
industry
went
to
the
department
of
revenue
with
a
proposal
on
how
to
distribute
those
funds
and
and
to
treat
that,
and
the
department
of
revenue
has
acknowledged
that
they
do
have
an
agreement
with
kingland
red
mile
that
partnership
and
it's
my
understanding.
They
have
just
recently
done
the
same
related
to
oak
grove
and
the
partnership
that
is
there.
So
this
is
an
area
where
this
statute
might
need
a
little
more
guidance
so
that
these
agreements
aren't
necessary
that
you
know
in
statute.
E
We
can
define
or
detail
how
that
distribution
should
occur
when
it's
a
joint
venture
between
two
different
breeds
of
tracts.
So
just
wanted
to
point
out
that,
okay,
let's
move
on
to
inner
track
and
simulcast
wagers
and
as
we
move
here,
please
note
that
the
rate
increases
it's
no
longer
one
and
a
half
percent.
E
It's
three
percent
and
we
have
distributions
just
like
we
do
to
the
for
live
wagers
and
for
historical
horse
racing
to
the
development
fund
to
equine
industry
fund
to
higher
education
equine
fund
to
equine
drug
testing
fund
simulcast
is
a
little
bit
different
in
that
wagers
are
accepted
at
all
tracks,
but
they
are
only
taxed
if
the
wager
is
made
at
a
thoroughbred
race
track.
If
the
wager
is
made
at
a
standard
track.
The
three
percent
is
actually
retained
by
the
track.
E
You'll
note
down
really
in
that
really
fine
print
at
the
bottom.
You
probably
can't
see
on
the
screen,
but
that
three
percent
is
allocated
as
follows:
with
two
percent
for
capital
improvements,
promotions,
advertising
and
purses,
0.75
percent
for
overnight
purses
and
0.25
percent
for
the
kentucky
standard
bread
development
fund.
So
the
majority
of
that
three
percent
is
maintained
by
the
standard
track,
with
only
a
portion
of
that
coming.
E
E
Once
again,
we
provide
data
from
the
kentucky
horse
racing
commission
on
from
fiscal
year
7017
through
our
current
fiscal
year
year
to
date,
remembering
that
that
is
11
months
of
data
there
and
you
can
see.
We
also
have
another
development
fund
that
is
introduced
here
through
the
the
simulcast
wagering,
and
that
is
a
fund
related
to,
and
I'm
gonna
have
to
read
this
because
it's
a
really
long
name.
E
We
we
have
it
shown
here
as
quarter
horse
development
fund,
but
the
actual
name
is
the
kentucky
quarter,
horse
paint,
horse,
appaloosa
and
arabian
development
fund,
and
that
is
all
the
the
the
other
types
of
horses
that
do
have
race
meetings
throughout
the
country.
E
Okay,
next
slide
is
related
to
the
tax
distribution
for
advanced
deposit
account.
Wagering,
the
rate
is
one
half
of
one
percent,
and
the
distribution
here
is
not
based
upon
the
amount
wagered,
but
it
is
on
the
percent
of
tax
revenue
received.
So
that's
a
little
bit
different
and
it's
an
85
15
split
with
85
percent
remaining
with
either
the
the
track
association
conducting
the
race
or
the
host
track
and
15
percent
being
deposited
into
the
general
fund.
A
Let
me
just
give
an
example:
so
if
I've
been
known
away
from
home
to
wager
on
horse
races-
and
that
is
obviously
taxed
at
a
much
lower
rate
and
senator
when
was
this,
was
this
2010
2014?
When
was
this
rate
set.
D
A
2010.,
so
this
was
a
fledgling
industry,
then
you
can
see
over
time
that
this
has
been.
The
growth
area
will
continue
to
be
the
growth
area.
A
I
did,
and
you
can
see
that
the
tax
rate
is
much
much
lower
than
the
regular
rate
and
I'm
at
the
point
where,
if
I'm
at
the
track,
I
wager
on
my
phone
rather
than
in
person
with
in
a
machine
or
at
a
window,
because
well
it's
more
convenient
it's
easier.
I
don't
have
to
carry
around
a
bunch
of
cash
and
I
don't
have
to
worry
about
leaving
a
hundred
dollar
voucher
in
a
machine
which
I
have
done
before.
A
So
I
think
that's
obviously
something
that
that
we
need
to
discuss.
I
do
have
a
question
in
that
regard.
You
know
I
and
I
think
I
know
the
answer,
but
I
have
an
app
on
my
phone.
Sometimes
I
sit
at
my
computer
and
and
bet
on
on
an
adw.
A
E
Okay,
we
have
some
pictorial
representation
of
what
we've
really
discussed
here
so
far.
Today
you
can
see
the
pie
chart
with
by
revenue
produced
to
the
general
fund
based
upon
the
wager
type,
with
historical
horse
racing
being
81.6
percent
of
that
revenue.
E
Simulcast
is
next
with
9.5
live
racing
and
then
advanced
deposit
account
wagering
there
a
few
years
back
that
that
biggest
blue
portion
would
have
been
live
racing,
but
you
can
see
how,
over
time
historical
horse
racing
has
become
the
leader
just
want
to
point
out
that
this
is
2019
data.
It's
not
our
current
year
and
it's
not
2020
because
of
we
only
have
11
months
for
our
current
year
and
2020
was
not
really
a
normal
year.
So
this
is
from
2019.
E
The
next
pie
chart
we
have
is
the
revenue
allocation
by
fund
so
that
you
can
see
the
thoroughbred
development
fund
is
46.3
percent
general
fund
40.6
once
again
we're
using
2019
data
to
show
you
these
with
the
the
remaining
funds
here
at
the
bottom
and
the
fact
that
the
kentucky
quarter
horse
paint
horse,
appaloosa
and
arabian
development
fund
really
doesn't
appear
on
this
graph,
because
it
is
such
a
small
percentage.
E
How
really?
What
you
see
is
that
that
purple
line
there
at
the
top
is
historical
horse
racing
based
upon
the
handle
there
and
how
how
that
has
increased
you
can
see
they
were
very
close
together,
relatively
close
together
in
2015,
but
that
increase
has
really
swamped
the
the
lines
on
the
other
types
of
of
wagers.
Our
chief
economist
says
he
really
doesn't
like
this
because
of
that.
You
really
can't
see
what's
going
on
with
the
other
wagers
because
of
the
magnitude
in
the
chart
related
to
historical
horse
racing.
E
But
you
know,
if
you
were
to
dive
deeper,
you
will
see
that
live
racing
is,
is
trending.
Downward
adw
is
trending.
Upward
simulcast
is
about
the
same,
so
so
one
more
picture
to
look
at
and
then
the
next
group
of
slides
that
we'd
like
to
talk
about,
are
getting
in
a
little
bit
more
data
on
what
happens
to
a
two
dollar
wager
that
is
made
through
each
type
of
of
wager.
E
That
is
that
is
placed
so
right
here
we
have
a
two
dollar
wager
made
on
a
live
race
that
large
blue
portion
of
the
bar
chart
on
the
left-hand
side.
Is
that
amount
that
is
returned
to
the
public?
That's
what
center?
There
was
talking
about
that
80
to
90
percent,
that
is
returned,
and-
and
that
is
an
important
fact
of
of
the
wager
that
that
that
amount
is
returned
to
the
public
as
winnings.
E
You
can
see
very
small
percentages
or
are
amounts
since
really
of
the
excise
tax
at
three
cents.
Backside
improvement
fund
of
one
cent
breakage,
that's
a
term.
You
may
not
be
familiar
with.
That's
that's
just
the
rounding
that
occurs
in
in
the
payout
of
of
a
winning
ticket.
E
You
know
they
don't
pay
you
12.52
cents,
you
know
or
whatever
it's
it's
in
multiples
of
of
dimes.
So
that's
that
rounding
and
then
the
the
net
commission
from
that
two
dollar
wager
of
34
cents.
So
that's
really
the
revenue
that
you're
talking
about
that
34
cents.
E
E
Next
chart
we
have
is
oh,
are.
C
And
mr
chairman,
this
gets
to
exactly
what
I
was
trying
to
ask
earlier.
It
jennifer
the
the
one
that
you've
got
labeled
returned
to
public.
Is
that
provision,
or
actually
probably
better
for
you
to
answer?
Is
that
portion
governs
statutorily
or
is
that
just
kind
of
this
is
how
it
works
out.
You
know
on
on
that
percentage.
B
That
limit
that
I
talked
about
for
the
commission
because
essentially,
what's
this
whole
picture,
I
know
we've
got
net
commission
kentucky
excise
tax,
but
let's
step
back
for
a
second,
when
you
you're
betting,
two
dollars,
20
percent
40
cents
of
the
two
dollars
will
be
your
commission.
That's
the
gross
revenue
and
the
rest
is
implied
as
the
return
to
public.
So
yes,
the
statute
is
implying
that
whatever's,
after
that
statutory
maximum
for
the
commission
has
been
met,
has
to
go
back
to
the
player.
C
So
we
by
statute
have
regulated
the
commission,
but
implicit
to
that
is
what
goes
back
to
the
gambler
at
that
point
and
then
I'm
assuming
that
most
folks
will
max
out
that
commission
percentage,
but
it
like
you,
said
earlier,
it's
within
their
discretion
to
reduce
it.
If
they
wanted
to
say
hey,
you
know,
I
don't
know
we
if
they
wanted
to
market
something
like
we
guarantee
90
return
to
gambler
or
return
to
the
better
or
whatever.
B
B
You
they
will
drive
more
revenue
if
they
met
the
maximum,
but
a
lot
of
our
tracks
like
for
this
one,
our
average
that
we're
seeing,
because
this
is
combined
with
straight
and
exotic
wagers-
we're
seeing
an
average
of
20
percent
here.
So
we
will.
We
don't
really
see
the
maximum
on
most
of
the
exotic.
A
Graph
or
illustration,
we'll
call
it
two
things
one:
we
want
people
to
play
the
lottery
because
it
funds
education,
but
for
those
who
are
concerned
about
people
you
know
gambling,
you
know
they're
going
to
get
more
of
their
money
back
on
average,
playing
a.
B
A
Mutual
wager
than
they
are
the
lottery
who,
I
think,
maybe
half
of
the
money,
goes
back
to
the
to
the
player,
so
just
want
to
put
that
out
there
and,
and
secondly,
we're
going
to
talk
about
a
lot
of
issues
in
in
this
task
force
over
these
meetings
and
one
issue
I'm
going
to
talk
about
is
taking
care
of
the
bed.
Ores
and
one
of
those
things
is
the
breakage,
which
is,
as
you
said,
is,
is
rounding,
which
sounds
innocuous,
but
you
know
in
new
york
and
I
believe
woodbine.
A
You
know
that
if
you
they
will
pay
you
to
10
cents
on
a
win
bet
or
a
place
bet
or
a
show
bet.
So
you
might
get
710
on
a
win
bet
at
those
tracks,
whereas
you
would
get
seven
dollars
here
in
on
in
kentucky
and
well
most
other
states
and,
as
you
can
see,
it's
it's
a
minuscule
percentage,
but
it
would
certainly
help
the
bettors
because,
as
I've
told
most
most
of
the
folks
at
the
tracks-
and
if
for
those
I
haven't
gotten
to,
they
can
hear
it.
A
This
way,
we've
taken
care
of
of
the
tracks.
We've
taken
care
of
the
breeders,
the
bettors
are
the
ones
that,
without
whom
we
have
no
show
to
put
on,
and
so
as
one
of
those
bettors
we're
going
to
make
sure
that
we
take
care
of
those
folks
and
and
breakage
is
one
of
the
ways
in
in
which
we
can
do
that.
So,
thank
you.
Any
other
questions
to
this
point.
E
Okay,
next
would
be
a
wager
based
on
historical
horse
race,
and
you
can
see
very
much
very
similar,
a
little
bit
different
composition,
but
very
similar
with
one
dollar
and
83
cents
of
that
two
dollar
wager
being
returned
to
the
public
three
cents
to
the
excise
tax
and
then
net
commission.
There.
A
B
E
Okay,
next
is
a
wager
made
through
summercast
at
a
thoroughbred
track,
a
dollar
58
cents
of
that
two
dollar
wager
returned
to
the
public:
kentucky
excise
tax
of
six
cents;
net
commission
of
34.
A
All
right,
senator
thayer,
has
been
wearing
out
his
pencil.
It's
down
to
a
nub,
writing
notes,
so
senator
there,
the.
D
Floor
is
yours,
I'm
a
noted.
Note
taker,
mr
chairman.
Thank
you,
mr
chairman.
I
just
want
to
sort
of
expand
upon
a
couple
of
things
that
jennifer
said
she
mentioned
the
term
instant
racing.
That
is
a
brand
name.
That
was
the
name
originally
given
to
the
the
historical
horse
racing
machines
that
were
originally
developed
in
arkansas
and
the
instant
racing
is
to
historical
racing
as
kleenex
is
to
tissue.
D
So
that's
why,
in
our
statute,
it's
referred
to
lower
case
historical
horse
racing
and
not
by
a
brand
name.
Also,
as
she
talked
about
the
corbin
facility,
there
is
a
new
harness
track
going
to
be
built
in
corbin
and,
I
believe,
a
track
extension
in
williamsburg.
The
track
extension
law
in
kentucky
allows
a
race
track
to
have
a
facility
open
for
wagering,
and
I
believe
it's
a
60
mile
radius
from
the
track.
D
That's
how
newport
racing
and
gaming
is
operated.
It's
turf
ways
facility.
That's
how
derby
city
gaming
is
operated
by
churchill
downs,
but
I
I
would
like
to
point
out
that
the
the
partnership
that's
building
the
track
and
corbin
is
spending
the
money
to
run
those
race
dates
right
now.
At
the
red
mile,
pretty
generous,
so
it's
called
the
corbin
at
the
red
mile
meet
really
good
news
for
for
fans
in
lexington
who
want
more
harness
racing
here
in
the
summer,
but
really
also
good
news
for
the
kentucky.
D
D
I
personally,
don't
think
that's
fair.
I
I
mean
I'm
glad
they're
they're,
being
good
citizens
and
paying
it,
but
again
why?
Why
charge
a
a
a
tax
on
admission
that,
where
they're
not
collecting
revenue,
I
feel
like
some
explanation
of
the
the
development
funds
for
this
committee
is
in
order
the
ktdf
and
then
the
standard
bread
development
fund.
D
So
we
are
kentucky,
is
a
net
exporter
and
representative
cook
knows
about
this.
I
was
I
watched
him
work
tuesday
afternoon.
I
watched
him
show
his
horses
at
phasic
tipton
and
and
sell
them
through
the
ring,
we're
a
net
exporter
about
80
percent
of
kentucky
breads
that
and
that
by
definition,
is
a
horse,
that's
sired,
by
a
kentucky
bay
stallion
and
born
and
raised
at
a
kentucky
farm.
Eighty
percent
of
those
horses
are
sold
and
they
go
to
the
other
33
states
that
have
pair
mutual
wagering
and
dozens
of
foreign
countries.
D
Everybody
runs
for
that,
whether
you're
bred
in
pennsylvania
or
new
york
or
england
or
ireland,
but
the
ktdf
fund
may
supplement
that
where
the
purse
becomes
75
or
80
or
even
100
000
for
kentucky
breads,
and
so
that
that
gives
an
incentive
for
people
to
buy
those
kentucky
breads
and
raise
them
in
kentucky.
It's
it's
a
very,
very
good
program
for
the
kentucky
equine
economy.
D
The
standard
breads
have
one
also
and
I'd
like
to
point
out.
There
is
such
a
fun
for
con
for
quarter,
horses,
appaloosas
and
arabians
and
paint
horses,
but
after
we
passed
that
bill,
creating
that
fund
quarter
horse
racing
disappeared
in
kentucky
altogether.
The
red
mile
used
to
run
a
really
cool
summer
meet
with
quarter
horse
racing
quarter.
Horse
racing
in
kentucky
has
very
strong
roots
in
western
kentucky.
D
Representative
dixon,
probably
is
familiar
with
the
old
riverside
downs
in
in
his
district
in
henderson
now
is
now
is
just
a
training
center
used
to
be
a
big
quarter.
Horse
track
and
bluegrass
downs
now
closed
in
paducah
used
to
run
quarter
horses.
So
I'm
certainly
an
advocate
for
one
of
our
kentucky
tracks
to
take
up
running
quarter
horse
races
again,
so
we
can
apply
some
of
that
money
on
on
races
for
for
kentucky
bread
quarter
horses
and
in
some
of
the
the
the
more
recent
the
slide
up
on
the
screen.
D
You'll
see
the
net
commission
out
of
that
net
commission
comes
the
base
association
purse
money
and
that
is
negotiated
between
the
tracks
and
the
horsemen.
There
are
two
horsemen's
groups,
the
kentucky
hbpa
and
the
kentucky
thoroughbred
association,
which
I
see
represented
in
the
room
today.
So
out
of
that
net
commission
comes
the
base
purse
and
that
is
a
negotiated
rate
by
contract
between
the
tracks
and
the
horsemen's
groups.
D
D
That's
a
tax
on
gross!
It's
a
much
higher
number.
If
you
extrapolate
it
to
what
it
really
is,
is
a
much
higher
tax
on
net,
because
the
tax
comes
out
of
those
net
commissions
of
that
that
10
percent
that's
left
over
after
the
winning
bettors
are
paid
on
a
historical
horse
race
and
the
what's
left
of
the
20
percent
after
the
80
is
paid
to
to
those
who
bet
on
live
racing.
So
that's
an
important
distinction
and
we're
going
to
take
a
deep
dive
on
that
as
these
meetings
continue
there.
C
Thank
you.
Thank
you,
chairman
to
senator
thayer's
point
about
the
ktdf.
I
think
it's
very
important
to
mention
that
other
states
and
canada
also
have
these
programs
and
very
very
heavily
promote
whether
it's
a
pennsylvania,
bread,
louisiana,
bread
or
canadian
bread,
and
that
this
is
you
know
it's
it's
a
competition
and
out
there
and
that's
why
the
ktdf
is
so
very
important
to.
A
D
That's
a
different
program,
different
program:
that's
the
kentucky
breeders
incentive
fund;
okay,
that's
a
that's
a
program
that
was
created
with
the
tax
reform
bill
that
was
passed
under
governor
fletcher
in
2005
that
repurposes
the
sales
tax,
the
six
percent
sales
tax,
that's
charged
for
the
privilege
of
breeding
a
mayor
to
a
stallion
that
money
now
goes
into
the
breeders
incentive
fund
and
rewards
successful
breeders
of
kentucky
breads
and
and
can
be
earned
when
a
kentucky
bread,
wins
stakes,
races,
allowance,
races
in
kentucky,
but
also
outside
of
kentucky.
D
That's
an
incentive
for
people
to
to
leave
their
mares
in
kentucky
year
round,
and
we
have
lots
of
people.
Representative
cook
can
speak
to
this
because
he's
in
the
business
we
have
a.
We
have
a
lot
of
people
who
don't
live
in
kentucky,
but
they
leave
their
mares
at
farms
like
representative
cooks
year
round
and
every
one
of
those
mayors
that
stays
here
is
a
factory
because
she
creates
revenue,
and
I
would
I
would
defer
to
representative
cook
to
talk
more
about
that
business
model
cut.
A
All
right
and
we
will
probably
cover
the
economic
impact
of
of
those
more
specifically,
as
the
meetings
go
on
this
year.
Anything
else,
spurred
by
this
conversation
and
would
like
to
add
or
ask
anymore
questions
of.
A
Thank
you
to
our
presenters.
We
appreciate
it.
To
sum
up,
the
next
meeting
is
august.
9Th,
that's
a
monday.
I
believe
it's
in
the
afternoon
and
three
o'clock.
There
you
go.
I
senator
and
I
are
going
to
be
discussing
our
next
meeting
but
in
the
topics,
but
I
think
we're
going
to
talk
a
lot
about
the
stan.
The
situation
in
the
horse
industry,
the
effect
of
of
of
all
all
these
successful
policies
going
forward.
A
Other
topics
you
know
certainly
will
will
come
to
bear,
but
senator
adams
problem
gaming-
I
I
believe,
will
be
one
and
certainly
one
thing
that
we
talked
about
on
the
house
floor.
That
was
a
concern
for
some
folks
was
effective
rate
of
the
taxes
and
that's
something
that
we
have
not
yet
figured
out
how
we're
going
to
address
in
this
committee,
but
it
will
be
addressed
at
some
point
soon.
So
with
that,
I
appreciate
everybody's
attendance
and
attention
and
we
stand
adjourned.
Thank
you.