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1 State Taxation of Horse Racing and Pari-Mutuel Wagering 1 (1946)

handle is hein.tera/staionhors0001 and id is 1 raw text is: STATE TAXATION OF HORSE-RACING AND PARI-MUTUEL WAGERING Introduction In 1877 the Congress of the United States adjourned to go to Pimlico, Maryland, in order to witness the muchtheralded race between the thorough-breds Parole, Ten Broeck, and Tom O'Chiltree. During the intervening years, publid interest in racing has steadily increased. The culmination of this growing interest appeared during the war period just concluded, In 1944 the attendance at 46 race tracks throughout this country reached the high total of 18 million people: And this group of race enthusiasts poured $1,136,000,000 across the counters of the pari-mutuel wagering machines. As the acceleration of interest in this sport became apparent, the states began to enact laws legalizing horse racing and the affiliated pari- mutuel system. This was done, in part, for the purpose of obtaining revenues with which to supplement existing state taxes, Thus the enactment of these laws witnessed correlative tax measures imposed on the business of racing and the pari-mutuel system. Kentucky led the way in 1906, and by the end of the present war, twenty-four states had various regulations governing racing. All of these states have some form of tax or license measures designed to obtain revenue from this source; and all of them have established state racing commissions for the purpose of administrative control. Since the revival of racing on a large scale, only one state (Texas) has repealed its law sanctioning racing? Consequently, horse racing and the parimnutuel oystem of betting have assumed a significant role aq a source of state revenues.1 The importance of this revenue source is well substantiated by recent figures, In 1944 a total of $57 million was collected by these states from taxes on horse racing and an additional $5.5 million was collected by various local units of government. These exclude federal collections of income and excess profits taxes estimated at $27 million.2 The $57 million also excludes state income taxes, Table 1 gives a composite picture of the revenue provisions in all the states currently permitting racing. 1. In several states -- especially Florida .- the pari-mutuel system is asso- ciated with dog racing; but because of its relative insignificance, nation- ally, the fiscal aspects of dog racing are excluded from this discussion, 2. Figures on federal taxes from Thoroughbred Racing Association.

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