30% Foreign Betting Tax Moves Closer to Elimination
Updated: Friday, May 9, 2003 10:36 AM
Posted: Friday, May 9, 2003 10:36 AM
A major hurdle blocking the potential growth of international simulcasting was cleared on Thursday night when the U.S. Senate Finance Committee approved by a 12-9 vote a major tax-cut bill that includes a provision eliminating a burdensome 30% withholding tax on winning pari-mutuel wagers placed by foreigners through U.S. pools.
Foreign tracks, such as Woodbine Entertainment in Canada, currently do not conduct common-pool wagering with U.S. tracks because of the 30% withholding tax on all winning tickets. As a result, separate pools on U.S. racing generally are small in size and discourage the participation of major players whose bets can have an effect on the odds. Elimination of the tax will open the doors for foreign tracks to bet into U.S. pools throughout the year, but especially for major events such as Triple Crown races and the Breeders' Cup World Thoroughbred Championships. Currently, only France wagers into U.S. pools for the Breeders' Cup because of a tax treaty.
The bill approved by the Senate Finance Committee calls for a $421-billion tax cut over the next decade. The House of Representatives is considering its own tax-cut package, which does not include language eliminating the 30% withholding tax on international wagers. The full Senate is expected to vote on its bill next week. If both versions pass, a House-Senate conference committee would rectify differences in the two bills, including the provision eliminating the 30% pari-mutuel tax.
"This has been one of our major legislative initiatives for the past three years," said Greg Avioli, deputy commission and chief operating officer for the National Thoroughbred Racing Association. "It's important to keep in mind, however, if and when we are successful in passing this legislation, we still have a significant amount of work to do to address protectionist laws in other countries that currently prohibit wagering outside of their countries."
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