By a margin 69-17-1, the U.S. Senate has passed the Foreign Sales Corporation (FSC) bill, which includes a measure that would repeal the 30 percent alien withholding requirements and allow the domestic horseracing industry to further export its product to foreign markets. The FSC bill passed the U.S. House of Representatives on Oct. 7 by a vote of 280-141. The bill now goes to the President for his signature. The President has 10 days (excluding Sundays) after receipt of the bill to sign the measure into law. The White House has indicated it will not oppose the legislation.

The primary focus of the FSC legislation is to repeal subsidies for U.S. exports that the World Trade Organization (WTO) has deemed illegal. Key supporters of the Thoroughbred industry in Congress included language in the bill that would eliminate the 30 percent withholding tax that foreigners would pay on winnings for pari-mutuel wagers into U.S. pools. The 30 percent withholding effectively precludes common pooling by foreign countries into U.S. wagering pools.

"This is a significant step in expanding the international market for American Thoroughbred racing," said National Thoroughbred Racing Association (NTRA) Commissioner D.G. Van Clief, Jr., "We are grateful to the NTRA members who have helped make this possible by contributions to the NTRA’s Legislative Action Campaign and Political Action Committee."

"The elimination of the 30 percent withholding has been one of our main legislative priorities for the last two years," said NTRA president Greg Avioli, who heads the NTRA's political initiatives. "Opening new markets and increasing international common pooling will benefit NTRA member tracks and horsemen."

NTRA officials expect that the elimination of the 30 percent withholding will help open the $85 billion international market for horseracing to U.S. common pooling. If five percent of that were to enter U.S. pools, another $4.25 billion in handle and some $135 million in commissions would be realized by domestic racing interests.

In addition to eliminating the 30 percent withholding, the FSC bill contains provisions to eliminate a series of tariffs on a variety of exports to the European Union, including horses. The tariffs began in March at 5% and have increased 1% each month since.

For more information contact Peggy Hendershot, (859) 422-2648, or e-mail: phendershot@ntra.com.