Washington State Horse Racing Commission. The Washington Horse Racing Commission (Commission) is responsible for licensing, regulating, and supervising all race meets held in Washington where the parimutuel system of betting is used.? The Commission is also responsible for inspecting each race course in the state at least once a year.

Betting or wagering on a horse race is lawful in Washington only if it is by the parimutuel method.? The parimutuel method is a wagering system in which the bets of a particular type are pooled, taxes and commissions are removed, and payoffs are calculated by sharing the pool among all of the winning bets. ?Licensees that operate race meets must withhold and pay to the Commission daily, for each authorized day of parimutuel wagering, a parimutuel tax that is a percentage of all the licensees' daily gross receipts from the licensees' in-state parimutuel machines.

The receipts from the parimutuel tax must be deposited in the Washington Horse Racing Commission Operating Account (Account), in addition to any gifts, grants, or endowments the Commission receives.? The Commission, or the Commission's designee, may authorize expenditures from the Account.? Moneys in the Account must be used for the Commission's operating expenses, except as otherwise required in the terms of a gift, grant, or endowment.
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Sums paid to the Commission, including license fees, but excluding licensee withholdings paid to the Commission related to nonprofit race meets and Washington-bred-only horse race payments, must be retained by the Commission for the payment of salaries to its members, secretary, clerical and office expenses, and all other expenses incurred.

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Parimutuel Tax.?There is a tax on parimutuel betting in Washington State. The tax rate is dependent on the gross receipts of the previous calendar year on in-state parimutuel machines. ?The tax rate that must be withheld and paid to the Commission daily is either:

• 1.3 percent if gross receipts from the previous calendar year are greater than $50 million; or
• 1.803 percent if gross receipts from the previous calendar year are less than $50 million.

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Gross receipts from the parimutuel tax are deposited into a non-appropriated Account for the Commission?s operating expenses. If sufficient funds are available for operating, then the Commission may spend up to $300,000 per fiscal year for the equine industry.

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If a licensee is a nonprofit, and meets less than ten days a year, they are not subject to the parimutuel tax.

Race Fee.? Every person wanting to hold a horse race with betting and wagering must apply to the Horse Racing Commission for a license. The licensee shall provide certain information on the race meet. The number of days the horse race meets as well as the gross receipts from parimutuel betting from the previous calendar year shall determine the daily fee. Licensees which had gross receipts from parimutuel machines in excess of $50 million in the previous year must pay a $500 daily fee, those at or below $50 million?must pay a $200 daily fee. There must be at least six, but no more than 11, races per day for each licensee subject to the daily fee.

The Commission is authorized to impose fees to pay federal fees and be in compliance with the Horseracing Integrity and Safety Act of 2020.

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Tax Credit. A tax credit is created for persons that conduct horseracing meets in the state on payments to either the Federal Horseracing Integrity Safety Authority or the Commission.? The person must have made the payment before claiming the tax credit.? In order to claim the tax credit, the person must file all returns, forms, and any other necessary information with the Department of Revenue.? Filing for the tax credit does not require an application.? The Commission must be able to provide information to verify eligibility for the tax credit.

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Funding Source for the Tax Credit. Beginning July 1, 2026, and July?1st of each year thereafter, the Office of the State Treasurer must transfer an amount not to exceed $1.5 annually into the newly created Washington Equine Industry Federal Regulatory Account.? The amount deposited into the Washington Equine Industry Federal Regulatory Account will be funded by the imposition of state sales and use taxes charged or levied on:

• equines;
• equine feed;
• prescription or over-the-counter drugs, or supplements dispensed to equines;
• equine tack;
• horse bedding and grooming supplies;
• other taxable sales directly related to equine ownership, riding or boarding; and
• the sale of horses including equines claimed at class 1 and class C regulated race meets.?

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Each biennium, the $1.5 million limit may be reviewed and increased for inflation as determined by the Department of Revenue and federal fee amounts as determined by the Commission.