Pari-Mutuel Racing Tax
Background
Colorado’s tax on pari-mutuel wagering was enacted in 1947.1 The pari-mutuel tax is an ad valorem tax levied on gross receipts from wagers on horse-racing events. Parimutuel tax revenue is subject to the revenue and spending limitations of TABOR.
Effective 2014, greyhound racing is illegal in Colorado,2 but pari‑mutuel wagering at off‑track facilities where a race is “simulcast” - remains permitted through September 2024. House Bill 23-1041 prohibits wagering on greyhound races, including races that are “simulcast”, eliminating pari-mutuel tax revenue from wagering on greyhound races beginning October 1, 2024.
Tax Rates
Taxes are levied on gross receipts from wagering on horse and greyhound racing events, prior to removal of the track or facility take and prior to the distribution of winnings. Tax rates and the disbursement of revenue vary by event as follows:
|
Event
|
Tax Rate
|
Distribution
|
|
Greyhound - Simulcast and Live
All Wagers*
|
4.5%
|
General Fund
|
|
Horse Racing – Simulcast
All Wagers
|
0.75%
|
|
|
Horse Racing – Live, the greater of:
All Wagers
per Race Day
|
0.75%
$2,500
|
|
|
Horse Racing – Simulcast
All “Exotic” wagers
|
0.25%
|
CSU School of Veterinary
Medicine (equine research)
|
|
Horse Racing – Simulcast
All “win, place, or show” wagers
All “exotic” wagers”
|
0.50%
1.50%
|
Held in escrow for the Horse
Owners and Breeders Fund
|
| *Obsolete in practice. See the 'Exemptions' section below. | ||
Tax Exemptions
Pari-mutuel wagers on simulcast greyhound racing broadcast through a horse racing facility are taxed at the 0.75 percent horse racing rate rather than the 4.5 percent greyhound racing rate. In 2014, live greyhound racing became illegal in Colorado and all simulcast races are broadcast through horse racing facilities. In practice, greyhound wagers are taxed exactly the same way as horse wagers. Tax revenue follows an identical distribution, except that 0.25 percent of wagers are dedicated to greyhound adoption programs rather than the CSU equine research program.
Distribution
See table above.
State Comparisons
Including Colorado, at least 39 states allow pari-mutuel wagering on horse or greyhound racing.3
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