HORSERACING DEMAND, PARIMUTUEL TAXATION AND STATE REVENUE POTENTIAL

Abstract

This study econometrically examines the determinants of California parimutuel horseracing activity, including the effect on parimutuel wagering and attendance levels of such economic and policy-related variables as income, unemployment, number of racing days, existence of racing competition, and the "takeout" and state tax rate. The major public policy implications of the findings are that legislative and regulatory changes involving the horseracing industry can significantly affect the state's parimutuel revenue position, and that decreases in the rate of "takeout" and state taxation may, by stimulating attendance, actually increase state revenues.