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Pari-Mutuel Racing Tax

Table of Contents

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 Rate

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.  Effective 2014, live greyhound racing is 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, 41 states allow pari-mutuel wagering on horse or greyhound racing.

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1Part 7 of Article 33, Title 44, C.R.S.
2House Bill 14-1146.
3Wes Burns. “Pari-Mutuel Betting Explained.” BettingUSA.com. 2024. https://www.bettingusa.com/racing/pari-mutuel/.
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