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— . Committee Report on Mutuel Taxation NEW YORK, N. Y., May 16.— One of the most important and interesting reports submitted to the National Association of State Racing Commissioners at its convention at the Hotel Commodore today was filed by the Committee on Pari-Mutuel Taxation, composed of Earl J. .Moyer, Nebraska, chairman; William E. Fay, Illinois; Emmet J. Kelley, New Hampshire, and E. E. Dale Shaffer, Kentucky. The report consisted of tabulations and graphs covering license fees charged racing associations conducting thoroughbred racing in the various turf states in 1947, the states pari-mutuel taxes, authorized takeout, breaks and disposition of breakage at thoroughbred tracks in 1948, state revenue from thoroughbred racing, 1942 to 1948, inclusive; pari-mutuel turnover by states from 1942 to 1948, average daily pari-mutuel turnover by states for the same seven-year period; comparison of average daily mutuel turnover and average per capita income payments for 19 states having racing in 1942 to 1948; comparison of average daily mtuuel turnover in New York and New Jersey, 1942-1948; denominational wagering at New York tracks, 1945-1948; effects of excessive taxation on New York racing since 1945; comparison of mutuel handle at New York tracks with major tracks in the United States, 1944-1948. Space forbids the presentation of the committees full tabulated and graph report in these columns, but the data submitted is authentic and revealing. The material was prepared and assembled by and under the supervision of Ellis Sutton, man ager of the Lexington office of Cotton and Eskew, certified public accountants, and much of the data was taken from an unpublished manuscript of R. W. Jennings, head of the Department of Business Administration of Morehead State College, Morehead, Ky. Mrs. A. E. Smith, acting secretary and treasurer, also cooperated by supplying material from the Lexington of-.fice of the Rational Association of State Racing Commissioners. New York Peak Reached in 1945 In an appendix to its report, the committee summarized the salient features of its findings. Referring to state revenue from racing the committee commented: ". . . While the peak in revenue from all the 23 states was reached in 1947, New-York reached its peak in the year 1945 and has shown a marked decline in each succeeding year through 1948. Although other factors might reasonably enter into the situation, this would seem to indicate that an increase in the tax — from 10 per cent to 15 per cent — does not always result in an increase in revenue in the state." Referring to the pari-mutuel turnover bystates, the report said that this "presents what seems to be the most interesting pictures of all." It added — "Especially is this true when we compare the states of New York and New Jersey, together with a comparison of New York tracks with- other major tracks in the United States. It will be recalled that New York increased its "take" from 10 per cent to 15 per cent in the year 1946 and that New Jersey increased its "take" from 10 per cent to 12 per cent in 1948 and also changed the breaks to the dime instead of to the nickel. The percentage of increase from 1944 to 1945 in all of the states shown is approximately 16 per cent, whereas .the increase in New Jersey and New York is 44 per cent and 10 per cent, respectively. Between the years 1945 and 1946, New Jersey shows an increase of approximately 70 per cent, and New York a decrease of 10 per cent, and the total of all states increased approximately 41 per cent. Increases in New Jersey "It should be kept in mind that in the year 1946 New Jerseys "take" and the breaks remained the same, whereas in New York the take was increased to 15 per cent. Following through to the years 1947 and 1948 with the pari-mutuel turnover, we find New York continuing to decrease in 1947 and 1948, with New Jersey increasing in 1947, but upon increasing the "take" and changing the breaks in 1948, a 4 per cent decrease under the prior year resulted. New York seemed to follow a general decline in those years while New Jersey continued to increase until the changes were introduced in 1948. "Those two states are compared mainly for the reason that they have comparable urban populations, are within the same area with similar economic conditions and with comparable per capita income payments. We also have present in both an increase in the take, coupled with changes in the breaks. With respect to the average daily pari-mutuel turn-over, it seems reasonable to believe that in both of these states the increase in the number of days in 1946 contributed to the decrease in the two states, but this lact does not appear to have accounted for the decrease in total pari-mutuel turn-over approximating 10 percent in New York that year, while New Jersey was increasing 78 per cent and the total of all states increased 41 per cent. Then, when we come to the year 1948, the year of the changes in New Jersey, we find the total pari-mutuel turn-over decreasing four per cent under the prior year whereas it had increased five per cent in 1947 over 1946. It is interesting to note — the steady trend of per capita income payments , as compared with the downward trend of average daily pari-mutuel turn-over. "Another angle of the question, and an important one, is that of how much of the wagering which normally would have been bet at the tracks is diverted to the bookmakers when an increase in take from the pools is put into effect. There are two things in particular to which attention should be directed. One is the decided decrease in 00 and 0 bets wagered at the New York tracks between the years 1945 and 1948. According to the annual report for the year 1948 of the New York Commission, the decrease in 1948 under 1945 of 00 bets amounted to some 26 millions of dollars, or from approximately 40 million to 15 million. The 0 bets decreased from approximately 114 million to approximately 72 million, or a decrease of 42 million. In that same, report the decrease in bets wagered between the two years is shown as amounting to only 20 million dollars. "While the large decrease might be partly attributable to other factors, the natural assumption would seem to be that those making a business of wagering are declining to pay the additional cost of betting at the track. This sort of reasoning is supported by a statement .quoted in Mr. Jennings manuscript, which is as follows: " Robert A. Pinkerton, head of the Pink-erton National Agency, Inc., which polices all New York tracks, reports that in the first 97 days of the 1946 New York .season, 406 bookmakers, or suspected bookmakers, were ejected. This figure compares with 233 ejected during the comparable period in f945. Of the 406 bookmakers ejected to July 26, 1946, it is estimated that approximately 75 per cent are newcomers, that is, persons whom the Pinkertons had not previously known as bookmakers. This percentage, says Mr. Pinkerton, is considerably higher than normal. There is no question in my mind but that the additional five per cent tax— in New York — is a decided inducement not only for a man to make book, but for a man to bet with a book." . T ,
