KRS § 138.510 — KY Code / Title XI / Chapter 138 / Section 138.510
138.510 Taxes on pari-mutuel wagering on live racing and telephone account, intertrack, and interstate wagering -- Exemptions -- Uses of tax revenue -- Order of disbursements -- Two-day international horse racing event -- International harness racing event
Status: in_force

138.510 Taxes on pari-mutuel wagering on live racing and telephone account,

intertrack, and interstate wagering -- Exemptions -- Uses of tax revenue --

Order of disbursements -- Two-day international horse racing event --

International harness racing event.

(1) (a) Before August 1, 2022, except as provided in paragraph (e) of this subsection

and subsection (3) of this section, an excise tax is imposed on all tracks

conducting pari-mutuel wagering on live racing under the jurisdiction of the

corporation as follows:

1. For each track with a daily average live handle of one million two

hundred thousand dollars ($1,200,000) or above, the tax shall be in the

amount of three and one-half percent (3.5%) of all money wagered on

live races at the track during the fiscal year; and

2. For each track with a daily average live handle under one million two

hundred thousand dollars ($1,200,000), the tax shall be one and one-half

percent (1.5%) of all money wagered on live races at the track during

the fiscal year.

(b) Beginning August 1, 2022, the excise tax imposed on all tracks conducting

pari-mutuel wagering on live racing under jurisdiction of the corporation shall

be one and one-half percent (1.5%) of all money wagered on live races at the

track during the fiscal year.

(c) Beginning on April 1, 2014, an excise tax is imposed on all tracks conducting

pari-mutuel wagering on historical horse races under the jurisdiction of the

corporation at a rate of one and one-half percent (1.5%) of all money wagered

on historical horse races at the track during the fiscal year.

(d) Money shall be deducted from the tax paid under paragraphs (a), (b), and (c)

of this subsection and deposited as follows:

1. a. Before August 1, 2022, an amount equal to three-quarters of one

percent (0.75%) of all money wagered on live races and historical

horse races at the track for Thoroughbred racing shall be deposited

in the Thoroughbred development fund established in KRS

230.400; and

b. Beginning August 1, 2022, an amount equal to three-quarters of

one percent (0.75%) of all money wagered on live races and

historical horse races at the track for Thoroughbred racing shall be

deposited in the Thoroughbred development fund established in

KRS 230.400 until forty-five million dollars ($45,000,000) has

been deposited during a fiscal year, at which point the amount

deposited in the fund shall decrease to four-tenths of one percent

(0.4%) of all money wagered on live and historical horse races at

the track for Thoroughbred racing for the remainder of the fiscal

year;

2. a. Before August 1, 2022, an amount equal to one percent (1%) of all

money wagered on live races and historical horse races at the track

for harness racing shall be deposited in the Kentucky standardbred

development fund established in KRS 230.770. Beginning August

1, 2022, an amount equal to one percent (1%) of all money

wagered on live races at the track for harness racing shall be

deposited in the Kentucky standardbred development fund until a

total of twenty million dollars ($20,000,000) has been deposited

during a fiscal year from this subparagraph, at which point the

amount deposited shall decrease to four-tenths of one percent

(0.4%) of all money wagered for the remainder of the fiscal year;

and

b. Beginning August 1, 2022, an amount equal to one percent (1%)

of all money wagered on historical horse races at the track for

harness racing shall be distributed in the exact amounts based

upon contracts between the parties that have been filed with the

corporation, but at least one-half (1/2) of the funds shall be

deposited into the Kentucky standardbred development fund

established in KRS 230.770 until a total of twenty million dollars

($20,000,000) has been deposited into the Kentucky standardbred

development fund during a fiscal year from this subparagraph, at

which point the amount deposited in this subdivision shall

decrease to four-tenths of one percent (0.4%) of all money

wagered for the remainder of the fiscal year. The corporation shall

provide the department all information necessary from the

contracts in order for the funds in this subparagraph to be

distributed;

3. a. An amount equal to one percent (1%) of all money wagered on

live races and historical horse races at the track for paint horse,

Appaloosa, and Arabian horse racing shall be deposited in the

Kentucky paint horse, Appaloosa, and Arabian development fund

established by KRS 230.445; and

b. An amount equal to one percent (1%) of all money wagered on

live races and historical horse races at the track for quarter horse

racing shall be deposited in the Kentucky quarter horse

development fund established by KRS 230.405;

4. An amount equal to two-tenths of one percent (0.2%) of all money

wagered on live races and historical horse races at the track shall be paid

out in equal amounts as follows:

a. To the equine industry program trust and revolving fund

established by KRS 230.550 to support the Equine Industry

Program at the University of Louisville, except that the amount

deposited from money wagered on historical horse races in any

fiscal year shall not exceed eight hundred fifty thousand dollars

($850,000);

b. To the University of Kentucky for equine industry programs at the

university, except that the amount paid from money wagered on

historical horse races in any fiscal year shall not exceed four

hundred thousand dollars ($400,000);

c. To the Bluegrass Community and Technical College for the

provision of equine industry programs by the system, except that

the amount paid from money wagered on historical horse races in

any fiscal year shall not exceed two hundred fifty thousand dollars

($250,000);

d. Amounts remaining from money wagered on historical horse races

in a fiscal year after payments are made in accordance with

subdivisions a., b., and c. of this subparagraph shall be distributed

in equal amounts to:

i. The Kentucky Horse Racing and Gaming Corporation for the

benefit of Thoroughbred, standardbred, and American

quarter horse aftercare facilities in Kentucky, in an amount

not to exceed two hundred fifty thousand dollars ($250,000).

The Kentucky Horse Racing and Gaming Corporation shall

serve as the administrative agent for these funds, and shall

distribute them annually to organizations engaged in the

accreditation and monitoring of aftercare facilities. Any

funds distributed under this subpart by the Kentucky Horse

Racing and Gaming Corporation shall be awarded to

aftercare facilities based in Kentucky only after the facilities

have achieved and maintained levels of service and operation

that resulted in national accreditation; and

ii. The Kentucky equine management internship program for

equine management training, in an amount not to exceed two

hundred fifty thousand dollars ($250,000); and

e. Any amounts remaining from money wagered on historical horse

races in a fiscal year after payments are made in accordance with

subdivisions a., b., c., and d. of this subparagraph shall be paid to

the general fund;

5. a. An amount equal to one-tenth of one percent (0.1%) of all money

wagered on live races and historical horse races at the track shall

be deposited in a trust and revolving fund to be used for the

construction, expansion, or renovation of facilities or the purchase

of equipment for equine programs at state universities and the

Bluegrass Community and Technical College, except that the

amount deposited from money wagered on historical horse races in

any fiscal year shall not exceed three hundred twenty thousand

dollars ($320,000).

b. These funds shall not be used for salaries or for operating funds

for teaching, research, or administration. Funds allocated under

this subparagraph shall not replace other funds for capital purposes

or operation of equine programs at state universities and the

Bluegrass Community and Technical College.

c. The Kentucky Council on Postsecondary Education shall serve as

the administrative agent for these funds, and shall establish an

advisory committee of interested parties, including all universities

and the Bluegrass Community and Technical College with

established equine programs, to evaluate proposals and make

recommendations for the awarding of funds.

d. The Kentucky Council on Postsecondary Education may

promulgate administrative regulations to establish procedures for

administering the program and criteria for evaluating and awarding

grants; and

6. An amount equal to one-tenth of one percent (0.1%) of all money

wagered on live races and historical horse races shall be distributed to

the corporation to support equine drug testing as provided in KRS

230.265(3), except that the amount deposited from money wagered on

historical horse races in any fiscal year shall not exceed three hundred

twenty thousand dollars ($320,000).

(e) The excise tax imposed by paragraphs (a) and (b) of this subsection shall not

apply to pari-mutuel wagering on live harness racing at a county fair.

(2) (a) Except as provided in paragraph (c) of this subsection, an excise tax is

imposed on:

1. All tracks conducting telephone account wagering;

2. All tracks participating as receiving tracks in intertrack wagering under

the jurisdiction of the corporation; and

3. All tracks participating as receiving tracks displaying simulcasts and

conducting interstate wagering thereon.

(b) 1. Before August 1, 2022, the tax shall be three percent (3%) of all money

wagered on races as provided in paragraph (a) of this subsection during

the fiscal year.

2. Beginning August 1, 2022, the tax shall be one and one-half percent

(1.5%) of all money wagered on races as provided in paragraph (a) of

this subsection during the fiscal year.

(c) A noncontiguous track facility approved by the corporation on or after

January 1, 1999, shall be exempt from the tax imposed under this subsection,

if the facility is established and operated by a licensed track which has a total

annual handle on live racing of two hundred fifty thousand dollars ($250,000)

or less. The amount of money exempted under this paragraph shall be retained

by the noncontiguous track facility, KRS 230.3771 and 230.378

notwithstanding.

(d) Money shall be deducted from the tax paid under paragraphs (a) and (b) of

this subsection as follows:

1. An amount equal to one percent (1%) of the amount wagered shall be

deposited as follows:

a. In the Thoroughbred development fund established in KRS

230.400 if the host track is conducting a Thoroughbred race

meeting or the interstate wagering is conducted on a Thoroughbred

race meeting;

b. In the Kentucky standardbred development fund established in

KRS 230.770, if the host track is conducting a harness race

meeting or the interstate wagering is conducted on a harness race

meeting;

c. In the Kentucky paint horse, Appaloosa, and Arabian development

fund established by KRS 230.445, if the host track is conducting a

paint horse, Appaloosa, or Arabian horse race meeting or the

interstate wagering is conducted on a paint horse, Appaloosa, or

Arabian horse race meeting; or

d. In the Kentucky quarter horse development fund established by

KRS 230.405, if the host track is conducting a quarter horse race

meeting or the interstate wagering is conducted on a quarter horse

race meeting;

2. An amount equal to twenty-five thousandths of one percent (0.025%) of

the amount wagered shall be allocated to the equine industry program

trust and revolving fund established by KRS 230.550 to be used to

support the Equine Industry Program at the University of Louisville;

3. An amount equal to one-twentieth of one percent (0.05%) of the amount

wagered shall be deposited in a trust and revolving fund to be used for

the construction, expansion, or renovation of facilities or the purchase of

equipment for equine programs at state universities, as detailed in

subsection (1)(d)5. of this section; and

4. An amount equal to one-twentieth of one percent (0.05%) of the amount

wagered shall be distributed to the corporation to support equine drug

testing as provided in KRS 230.265(3).

(3) If a host track in this state is the location for the conduct of a two (2) day

international horse racing event that distributes in excess of a total of twenty million

dollars ($20,000,000) in purses and awards:

(a) The excise tax imposed by subsection (1)(a) and (b) of this section shall not

apply to money wagered at the track on live races conducted at the track

during the two (2) day international horse racing event; and

(b) Amounts wagered at the track on live races conducted at the track during the

two (2) day international horse racing event shall not be included in

calculating the daily average live handle for purposes of subsection (1) of this

section.

(4) If a host track in this state is the location for the conduct of an international harness

racing event spanning multiple days that distributes at least five million dollars

($5,000,000) in purses and awards, the Tourism, Arts and Heritage Cabinet shall be

granted a race title sponsorship and promotional package at the international

harness racing event with all usual and customary benefits assigned to promote

Kentucky tourism. The Tourism, Arts and Heritage Cabinet shall not be charged

any fees for the promotional package.

(5) The taxes imposed by this section shall be paid, collected, and administered as

provided in KRS 138.530.