KRS 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 th e 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 Kentuc ky 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 corpora tion 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 tra ck 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 hi storical 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 mon ey 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 a mount
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 an d 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 f rom 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 universit ies 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 provi ded 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 subsecti on 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 participatin g 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 thr ee 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 equa l 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 detail ed 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 thi s 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 se ction 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 multi ple 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.