Foreign Gamblers Escape Gambling Tax

UNITED STATES – As reported by the Louisville, Kentucky Courier-Journal: "Foreign gamblers will escape U.S. taxes when they win on the Kentucky Derby and other American races under the corporate tax bill that President Bush is expected to sign.

"…It also adopts sweeping changes to dozens of federal taxes, including the repeal of a 30 percent tax on foreign gamblers' winnings on horse and dog racing. The National Thoroughbred Racing Association has pushed repeal for years, arguing that the tax discourages foreigners from betting on live broadcasts of U.S. races.

"The tax applied to gamblers from countries that do not have tax treaties with the United States or had tax treaties that did not address the gambling tax. The treaties typically shield citizens from being taxed both at home and abroad.

"…'It's a good thing for U.S. racing. It really changes the landscape,' said Karl Schmitt, president of Churchill Downs Simulcast Network, which handled more than $2 billion in wagers on races broadcast from Churchill Downs Inc.'s racetracks last year.

"Schmitt said the 30 percent tax on winnings has discouraged many gamblers from betting on U.S. races and has helped Hong Kong's racing industry.

"…Keith Ashdown, vice president for policy at Taxpayers for Common Sense, a tax watchdog group, criticized the repeal, saying while each of the tax changes in the bill may make sense for their industries, the result is a massive reduction of tax revenues…"