The president and CEO of Churchill Downs Inc. said March 3 his company is not opposed to proposed legislation in Kentucky that would impose a .5% tax on advanced deposit wagers from the state’s residents.
During a conference call with stock analysts to discuss CDI’s earnings that were released the previous day, CDI president/CEO Bob Evans said the company is not opposed to the measure because of the amount involved and its intended use.
"Most businesses don’t usually face both front-end and back-end taxes, but in this peculiar case, given that the amount is pretty small...and how those funds are then distributed, we think we can live with this one," Evans said in response to a question from analyst Steve Altebrando of Sidoti & Co.
Sponsored by Democratic Rep. Larry Clark of Louisville, the ADW tax has passed the House and was sent on to the Senate for ratification. The tax, which Clark estimates would generate $400,000 annually, would be split evenly between the Kentucky Horse Racing Commission, the track that is conducting live racing in the state at the time the wager is placed, and purses at the track with live racing. If there is no live meet, the tax proceeds would go to the track and its purse account that begins the next meet.
CDI's TwinSpires.com is the country’s largest ADW operation, taking wagers via the Web and over the telephone.
Evans said he did not know if other states would follow suit with the Kentucky tax. Altebrando noted that he did not understand the "rationale" behind the ADW tax, adding "it seems like it hurts Kentucky residents and Kentucky tracks."
Presently, taxes are imposed in Kentucky on-track and simulcast wagers, but not on ADW bets.