Kentucky Passes Tax On Online Wagers: Is This The Motive Behind The Domain Seizures?

As you know we are still waiting the decision of the Kentucky Supreme Court on the seize of the 141 domain names, but now we might be seeing additional motives behind the move.

On Friday the Kentucky’s House passed Bill which places a tax on online and phone betting, by an 85-8 margin.

Now, the measure will head to the Kentucky Senate.

This bill if passed would effect sites like TwinSpires.com, which is owned by the parent company of the Churchill Downs racetrack, which allow residents to wager on the horses “legally” online and over the phone.

The bill taxes bets at .5% for now saying that $400,000 per year could be generated at that level.

But for a tax, the proceeds under the bill would be distributed in a pretty strange manner.

Unlike most taxes, under this bill the state would keep just 1/3 of the tax and even then it would go not to the states general coffers for the benefit of its citizens, but instead to the Kentucky Horse Racing Commission, while another 1/3 of the tax one-third would go to the track the bet was placed with and go right to the track’s bottom line, and the final 1/3 would supplement the track’s purses.

So ultimately 2/3 of the “tax” would go back to the track.

Larry Clark, the speaker of the Kentucky House (DEM)  is quoted as saying:

“I think that it’s a way for us to advance the tracks as far as adding more purse money… so I think it’s something the Senate would look at. They talked about last session, when they did not want to do slots, finding more revenue for (tracks). This is one avenue that would find more revenue for them.”

Doesn’t sound so much as a tax but as a government backed funding of a private business.

Another move from Kentucky which sounds very questionable on constitutional grounds.

The elected officials in Kentucky I assume have heard of the constitution but maybe they should take a refresher course.