Track Owner: Tax Would Make Live Racing Prohibitive

The owner of Playfair Race Course in Washington said a proposed tax increase is behind his plan to cancel live racing in 2003.

Legislation in the Washington House of Representatives would raise the tax on any racetrack in the state with less than $50 million in handle from .52% to 1.803%. For the state, it would provide $179,000 of the $280,000 required annually to regulate Playfair, located in Spokane.

Track owner Eric Nelson said the tax would mean a cut in profits, and he has asked the Washington Horse Racing Commission to consider suspending the 2003 live meet so he can raise more money via simulcasting to support live racing in 2004.

"The net affect is it increases the tax to 10% of profit," said Nelson, who owns four mini-casinos in Washington and also Wyoming Downs. "It hurts the facility, but long-term, it has a real financial lag into what we have planned up there. It's putting a lot of stress on the camel's back. There's nothing more we'd like to do than race horses, but we don't want to get into anything halfway."

The bill passed out of committee April 16 and could be up for a vote on the House floor the next few weeks. If passed, it would take effect Jan. 1, 2004.

Nelson said he thinks the tax is unfair because Emerald Downs, the only other Class 1 facility in Washington, does not pay the levy because its handle is more than $50 million. However, that facility pays other taxes that go to the racing commission.

Nelson has also asked the racing commission to let him offer full-card simulcasting at another site other than Playfair. Washington statutes require any full-card simulcasting facility to offer live racing.

"At this point I don't see that his request is consistent with the statute," said Robert Leichner, executive director of the racing commission. "The commission could not allow that unless he can cite other examples of it in the past."

The racing commission itself is in limbo, as a bill to merge it into the Department of Gaming is still under consideration in the legislature. It is in the House Appropriations Committee awaiting a hearing.