Governor Kathy Hochul has proposed simplifying New York’s racing and pari-mutuel law by implementing a flat tax on betting handle and eliminating the practice of rounding down winnings for horse racing bettors. The current system is considered complex and outdated, with tax rates varying based on factors like the time of day a race is held or the type of bet placed.

The proposed changes aim to create a more straightforward pari-mutuel tax rate structure and eliminate the concept of breakage, which has resulted in millions of dollars being withheld from winning bettors over the years. The new system would round winnings to the nearest penny for all horse race winnings affected by the breakage law.

The Hochul administration’s budget plan also seeks to simplify how New York’s pari-mutuel tax is imposed on live racing handle, with a new flat tax system that does not anticipate any additional revenue for the state. The changes are intended to benefit the racing industry, entities, the state, and bettors by modernizing the system and eliminating outdated practices.