2005 - Harness Tracks of America, Inc.

HARNESS TRACKS OF AMERICAExecutive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, EditorTAX LEGISLATION INTRODUCEDThree U.S. senators have introduced legislationthat could revitalize horse racing ownership if itpasses. Republicans Mitch McConnell and JimBunning of Kentucky and Democrat Blanche Lincolnof Arkansas have introduced the Equine EquityAct, which would put horses on an equal taxplane with other enterprises. Jay Hickey, presidentof the Washington, DC-based AmericanHorse Council, said the legislation was wellnamed, since “it would eliminate the disparatetreatment that horse owners and breeders receiveunder several outdated and ill-conceivedfederal laws, including the federal tax code.”Under the proposed legislation, horses would bemade eligible for capital gains treatment after 12months, similar to other business assets; all racehorses would be placed in a three-year categoryfor depreciation purposes; and horses would becomeeligible for federal emergency assistanceunder circumstances presently enjoyed by otherlivestock and crop producers.Under the present tax code, gains from sales byindividuals of property used in a trade or business,including horses, qualify for long-term capitalgains and are subject to the maximum capitalgains tax of 15%. But where they are held forbreeding, racing, showing or draft purposes, theymust be held for 24 months to qualify for the 15%rate, unlike all other business assets, exceptcattle, which qualify after being held for 12months. Passage of the new legislation would endthis discriminatory treatment of horses under thetax code and allow owners to enjoy the reduced15% rate after holding a horse for one year, exceptwhere it was held specifically for sale.Horses also would be eligible for the same disasterassistance as other livestock, and senatorMcConnell says his new bill will removethat unfair tax burden “that discouragesinvestment in the horse industry.”July 29, 2005OHHA DROPS OUT OF OHRIAThe Ontario Horse Racing Industry Association,long considered the shining example of effectivecooperation in horse racing, suffered a seriousblow yesterday when the Ontario HarnessHorse Association announced its board hadunanimously approved withdrawing fromOHRIA. The chairman of OHRIA, Tom Deacon,said of the defection, “OHHA has alwaysbeen a restless participant in OHRIA. NowOHRIA is left to redefine itself. At nextWednesday’s OHRIA meeting we will determinewhat will happen next. It is my hope thatthe remaining participants will wish to continuewith the organization even without their vagabondfriend.” OHRIA, under its former director,Jane Holmes -- winner of HTA’s MessengerAward in 2002 for her pioneering work inhelping unite the industry in Ontario -- playeda significant role in working with the OntarioLottery Commission to bring slots to Ontario’s17 tracks. Ms. Holmes now is a key memberof the executive staff at Woodbine.$90 MILLION TO GO ONLINEThat’s what International Game Technology paidthis week to acquire SanFrancisco-basedWagerWorks, which provides content to Internetgaming sites including the World Poker Tour’sonline casino and Richard Branson’s Virgin Groupin Great Britain. IGT chairman and CEO T JMatthews says the purchase will let IGT distributegames across the Internet, wireless phones,PDAs and interactive television.HTA, HANOVER HONOR GROOMHTA chairman Chris McErlean and Hanover ShoeFarms president Jim Simpson will present HTA’sCaretaker of the Year Emma Johansson with a JimPonter oil painting of herself with her two championsof 2004, Windsong’s Legacy andHousethatruthbuilt, during the Meadowlands’huge racing card tomorrow night.