Thoroughbred racing is set to celebrate its biggest weekend of the year with the Breeders’ Cup at Del Mar.
The sport’s leaders are using that boost to push Congress to fix a provision from the “One Big Beautiful Bill” that they said could keep bettors away from tracks next year, which would be critical in the state that offers Kentucky horse betting apps as part of a major statewide industry.
On Tuesday, the National Thoroughbred Racing Association unveiled a campaign to promote the WAGER Act, a bill sponsored by a U.S. Representative from Kentucky, Andy Barr (R-Lexington). Barr’s measure would allow bettors who itemize their deductions on federal tax returns to deduct gambling losses to fully offset their winnings.
Gamblers could do that before, but when Congress passed the massive spending bill in July, it included a measure reducing the threshold from 100% to 90% starting in 2026. That would affect bettors around the country, including those using Kentucky sports betting apps.
What’s At Stake For Horse Racing
According to the NTRA’s release announcing the campaign, the sport could lose out on hundreds of millions in parimutuel wagers next year if gamblers cannot take a full deduction. Tracks use a portion from those wagers, called the takeout, to cover various costs associated with racing.
“Estimates say this could reduce track handles by 5-8%,” Barr said in the statement. “I’m going to keep pushing the WAGER Act to restore this full deduction so that our industry can flourish.”
Barr chairs the Congressional Horse Caucus. His district in the Bluegrass region of the state includes horse farms that produce many of the thoroughbreds raced across the country.
Barr is not the only lawmaker calling for the full deduction to be restored. Rep. Dina Titus, a Nevada Democrat whose district includes the Las Vegas Strip, and U.S. Senator Catherine Cortez Masto (D-Nev.) have filed similar bills to restore the deduction.
Proponents: Sport Can’t Take Another Hit
Horse racing used to be one of the country’s most popular sports, primarily because it was one of the few ways people could bet legally in most states. However, racing has now faded toward the back of the pack as states have embraced lotteries, casino gaming and wagering on sports, including the Kentucky sports betting that launched in fall 2023.
In 2003, the collective handle for betting at American thoroughbred tracks was nearly $15.2 billion. That number has dropped and plateaued since, leading to numerous tracks shutting down. Last year, the sport produced a handle of $11.3 billion, a 3.3% decline from 2023. Bettors have not wagered more than $13 billion on racing in a year since 2008.
NTRA President and CEO Tom Rooney said the One Big Beautiful Bill included several measures that would help the sport. However, he said the 90% deduction limit would tax bettors “on phantom income.”
For example, if a bettor won $150,000 in gambling proceeds, they would only be able to deduct $135,000 in losses starting in 2026, even if they lost more. That individual would need to pay taxes on $15,000 in winnings, despite their net income from gambling being lower than that.
“This provision will have a negative impact on our customers who fuel a $36 billion industry responsible for nearly half a million jobs, thousands of small agribusinesses, and millions of acres of open working space,” Rooney added.
Breeders’ Cup Rivals Triple Crown Events
On Friday and Saturday, Del Mar Thoroughbred Club near San Diego will host the 42nd annual Breeders’ Cup, a series of races that serve as the world championship for thoroughbred racing. The main event will be the 1-1/4-mile Classic, though Kentucky Derby winner Sovereignty was scratched from the race on Wednesday because of a fever.
It’s the second consecutive year for Del Mar to host the event, which rivals the Kentucky Derby and the Triple Crown as racing’s biggest event. Last year, bettors wagered $179.2 million over both days, with the 12-race Breeders’ Cup Classic card on Nov. 2, 2024, attracting $115.5 million in handle.
That total is comparable to the all-day handle for the Preakness and Belmont stakes. This year’s Preakness card generated more than $110 million in wagers, the second-highest total, and that came even though Sovereignty skipped the second leg of the Triple Crown.
Three weeks later, the Belmont 12-race card finished with a handle of $101.9 million. That figure was hindered somewhat by rainy weather that canceled several high-profile turf races leading to the Belmont, which featured Sovereignty defeating Preakness winner Journalism in a near repeat of the May 3 Kentucky Derby.
The Derby is the only U.S. racing event to outpace the Breeders’ Cup. Churchill Downs reported this year’s Run for the Roses generated a handle of $234.4 million, and the entire race day saw $349 million wagered.
Betting on the Breeders’ Cup is available through Kentucky sports betting sites FanDuel and Caesars KY Sportsbook, both of which let customers use funds from their online sports betting to place parimutuel wagers.
USA Today photo by David Frerker
