KY Bill Taxes 20% of Sports Wagering

Article: https://www.legalsportsreport.com/15679/kentucky-bill-sports-betting/
Bill: http://www.lrc.ky.gov/recorddocuments/bill/18RS/BR155/bill.pdf

Bill page 19, lines 12-13: "An excise tax is hereby imposed on all sports wagering facilities at the rate of twenty percent (20%) of the total amount wagered."

Basically, Kentucky has proposed a bill that would only go into effect if federal law were to change. At first, I thought the article was wrong. There's no way people could be this stupid. Then I decided to look into the wording of the bill and saw that it was, in fact, 20% of the handle.

Is this an attempt by the race industry to intentionally handicap sports betting? Nobody's going to take a coin flip at -130 to -140.

Sounds like they don't want Sports wagering in their Commonwealth.
By the way, don't most horse bettors give up 20% or more?

I imagine that the 20% excise tax on all wagers (the handle) has been set so as to allow the sponsors of the bill to claim an enormous cash windfall for the State of Kentucky, so that they can overcome the objections of the "moral majority" and allow the bill to be considered in the state legislature. Maybe the plan is to lower the excise tax after they have managed to get the bill to pass or to amend the excise tax downward just before the vote.

Realistically, no knowledgeable sports bettor would place wagers at a sports book where there is a 20% rake before the 10% vigorish.

Quote: ahiromu

Then I decided to look into the wording of the bill and saw that it was, in fact, 20% of the handle.

Seems impossible. However, the point was made that this is what is done in para mutual pools. Could this include what we call "juice" or "vig"?

IANALBIALOOTI*, but the way I read this bill, the 20% excise tax applies to betting on horse races at the tracks as well. Yes, that is about what the pari-mutuel rake is, but not all of that money goes to the state.

*I Am Not A Lawyer But I Act Like One On The Internet

IDNRTABIAL*

I assume "handle" means total action? Even if odds were (are?) at -140, it only has a HE of 14.28%. Odds of -200 have a 25% HE. If 20% goes to the state, that leaves 5% to the book. That's atrocious.

Quote: ThatDonGuy

IANALBIALOOTI*, but the way I read this bill, the 20% excise tax applies to betting on horse races at the tracks as well. Yes, that is about what the pari-mutuel rake is, but not all of that money goes to the state.

*I Am Not A Lawyer But I Act Like One On The Internet

Damn you, I was reading the IANALBIALOOTI and got to "act like one on" and couldn't figure out the rest. :( Then I scrolled down and saw definition or whatever of your acronym. I was so close!!!

Quote: NokTang

Seems impossible. However, the point was made that this is what is done in para mutual pools. Could this include what we call "juice" or "vig"?

Quote: ThatDonGuy

IANALBIALOOTI*, but the way I read this bill, the 20% excise tax applies to betting on horse races at the tracks as well. Yes, that is about what the pari-mutuel rake is, but not all of that money goes to the state.

*I Am Not A Lawyer But I Act Like One On The Internet

You guys may be on to something. According to their definition of sports wagering, betting on horses is encompassed by "sports wagering". I get paid to read documents like that... it's not worth doing it for free. Stupid lawyers. We'll see where it goes.