|NTRA Legislative Update: Bill for Elimination
of 30% Withholding on Foreign Wagers Passes House and Senate – Goes to President
By a margin 69-17-1, the U.S. Senate has passed
the Foreign Sales Corporation (FSC) bill, which includes a measure that
would repeal the 30 percent alien withholding requirements and allow the
domestic horseracing industry to further export its product to foreign
markets. The FSC bill passed the U.S. House of Representatives on Oct.
7 by a vote of 280-141. The bill now goes to the President for his signature.
The President has 10 days (excluding Sundays) after receipt of the bill
to sign the measure into law. The White House has indicated it will not
oppose the legislation.
The primary focus of the FSC legislation is to repeal subsidies for U.S.
exports that the World Trade Organization (WTO) has deemed illegal. Key
supporters of the Thoroughbred industry in Congress included language
in the bill that would eliminate the 30 percent withholding tax that foreigners
would pay on winnings for pari-mutuel wagers into U.S. pools. The 30 percent
withholding effectively precludes common pooling by foreign countries
into U.S. wagering pools.
"This is a significant step in expanding the international market
for American Thoroughbred racing," said National Thoroughbred Racing
Association (NTRA) Commissioner D.G. Van Clief, Jr., "We are grateful
to the NTRA members who have helped make this possible by contributions
to the NTRA’s Legislative Action Campaign and Political Action Committee."
"The elimination of the 30 percent withholding has been one of our
main legislative priorities for the last two years," said NTRA president
Greg Avioli, who heads the NTRA's political initiatives. "Opening
new markets and increasing international common pooling will benefit NTRA
member tracks and horsemen."
NTRA officials expect that the elimination of the 30 percent withholding
will help open the $85 billion international market for horseracing to
U.S. common pooling. If five percent of that were to enter U.S. pools,
another $4.25 billion in handle and some $135 million in commissions would
be realized by domestic racing interests.
In addition to eliminating the 30 percent withholding, the FSC bill contains
provisions to eliminate a series of tariffs on a variety of exports to
the European Union, including horses. The tariffs began in March at 5%
and have increased 1% each month since.
For more information contact Peggy Hendershot, (859) 422-2648, or e-mail: