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With the threat of One Big Beautiful Bill raising concerns among the gambling public, advocates for horse racing are still hopeful for a reversal of the bill before it is set to take effect next year. Shawn Smeallie, a famed industry lobbyist, showed optimism during a conference on horse racing, stating that there's widespread support in Congress to reverse a provision to limit gambling loss deduction.

Horse racing advocates are expressing cautious optimism that a recent and highly contentious tax change impacting gambling deductions will be rolled back before it takes effect in 2026. Speaking at The Jockey Club's Round Table Conference on the 31st of July, industry lobbyist Shawn Smeallie highlighted growing bipartisan support in Congress to undo a provision limiting the deduction of gambling losses.

The change - tucked into the recently passed 'Big Beautiful Bill' - caps the amount of gambling losses that can be claimed against winnings at 90%. Critics say this adjustment unfairly punishes bettors and could have unintended consequences for the broader racing industry.

"Taxing losses": a dangerous precedent

Smeallie, who represents the racing industry through his firm ACG Advocacy, warned that the new rule could result in some gamblers paying taxes on net losses - an unprecedented and illogical situation. "One tax increase that did sneak into the bill, unbeknownst to the very powerful American Gaming Association, was a provision allowing only 90% deduction for gambling losses," said Smeallie. "This would actually create a scenario for gamblers where they would have to pay taxes on their losses."

To illustrate, Smeallie presented the case of a bettor with $300,000 in winnings and $320,000 in losses. Under the current law, this player would be allowed to deduct only 90% of their losses ($288,000), meaning they would still be taxed on $12,000 in income - despite losing $20,000 overall for the year.

Legislative fix gaining momentum

The racing industry isn't alone in calling for the tax change to be reversed. According to Smeallie, legislation has already been introduced in both chambers of Congress to restore full deductibility of gambling losses. He anticipates the fix will be included in a broader tax bill expected this fall.

Several key senators from both parties are backing the reversal, including Sen. Ted Cruz from Texas, Sen. Bill Hagerty from Tennessee, and Nevada Democrats Sen. Catherine Cortez Masto and Sen. Jacky Rosen. Their support reflects a growing consensus that the 90% deduction cap is unworkable for high-volume gamblers and detrimental to gaming-related industries. Powerful stakeholders, such as the American Gaming Association, have also joined the effort, aligning with racing advocates to protect the interests of bettors and the businesses that rely on their activity.

Bonus depreciation victory shows industry's clout

While the 90% rule remains a concern, Smeallie highlighted one major win for racing in the final version of the Big Beautiful Bill: permanent 100% bonus depreciation. This tax incentive, which allows for full write-offs of qualifying property like equipment and fencing, barns, and certain horse expenditures, had been at risk earlier in the legislative process.

"Making 100% bonus depreciation permanent was a huge victory," said Smeallie. "It allows for long-term planning by owners and farms and provides much-needed stability."

Call to action for industry leaders

Smeallie concluded his remarks with a rallying cry to the Round Table audience, urging continued engagement with lawmakers on Capitol Hill. He emphasized the critical role of grassroots influence within the racing community.

"Many of you in this room have personal relationships with policymakers in Washington," he said. "Your voices make a difference with key decision-makers. We need your help on issues important to the industry, and I can assure you, there will always be issues." He also pointed to other emerging legislative concerns, including labor visa policies affecting backstretch workers and threats to the Horseracing Integrity and Safety Authority. The message was clear: vigilance, communication, and unity will be essential as the industry navigates a challenging policy landscape.

"We are a national, nationwide industry, not without controversy," Smeallie said. "If this (depreciation) tax change should rear its ugly head again, we need our champions ready, able, and willing."

The Kentucky Derby was off to an excellent start this year as it managed to receive a record number of bets for the particular race, for the day, and for the week. According to sources, betting on the card for the Kentucky Derby at Churchill Downs was at $349 million - up by 9% from last year.

In spite of the rain and a slightly smaller crowd, Churchill Downs posted new handle records during the 151st Run for the Roses. Not even soggy weather could slow down the betting frenzy surrounding the 151st Kentucky Derby. Churchill Downs Inc. reported record-breaking handle numbers across the board despite a rain-soaked day at the historic racetrack, as Sovereignty surged to victory in the famed Run for the Roses.

Derby Day handle soars to $349 million

All-sources wagering on the Derby Day card totaled an impressive $349 million - an increase of 9% from last year's $320.5 million. The betting total for the marquee race itself, featuring 19 horses this year, reached $234.4 million, an increase of 11% from the previous record of $210.7 million set during a 20-horse field in 2024.

These numbers defied expectations, especially as Churchill Downs officials had earlier indicated that results might remain flat year-over-year following last year's 150th milestone edition.

Derby week also sets records

The full Kentucky Derby week saw all-sources handle climb to $473.9 million, topping last year's record of $446.6 million by 6%. Combined wagering for the Kentucky Oaks and Derby days hit $422.9 million - an increase of 7% over 2024's $395.8 million. These figures also reinforce the Kentucky Derby's status as a premier sporting event not only in terms of attendance but also as a major betting attraction nationally and internationally.

Churchill Downs' online wagering platform, TwinSpires.com, saw its own impressive milestones. Total Derby Day wagers placed through the service reached $108 million - a 17% jump from last year's $92.1 million. For the Derby race alone, TwinSpires handled $73 million in bets, representing a staggering 20% increase over the previous record of $60.9 million in 2024.

The crowd during Derby Day was estimated at 147,406, down by 6% from 2024's 156,710. The wet conditions likely contributed to the decline, though Churchill Downs still drew one of the largest crowds in American horse racing. The all-time attendance record of 170,513 set in 2015 remains intact.

Churchill Downs anticipates strong financial performance

Despite the dip in attendance and some underperforming ticket segments, Churchill Downs expects Derby week adjusted EBITDA to be its second-best ever, falling between $2 million to $4 million shy of last year's record. In 2024, the company reported Derby week EBITDA growth of between a total of $26 million and $28 million.

In a previous investor call held April 24, CDI Chief Executive Officer Bill Carstanjen acknowledged that certain lower-tier tickets, such as those for the newly launched Starting Gate Pavilion, sold below expectations.

We weren't able to go right to our long-term price target for that new area as we've done in past years, Carstanjen noted, emphasizing that the market for premium experiences wasn't as strong as it had been during the post-pandemic surge.

Looking ahead with optimism

Still, Carstanjen remains optimistic about future pricing and development strategy. "Part of our plan for the Derby has always been to introduce new areas and grow their value over time. This year might have taken a jolt, but we're confident in the long-term demand," he said.

The success of Sovereignty's win and the record-breaking wagering figures demonstrate that the Kentucky Derby remains an enduring spectacle, withstanding both market shifts and uncooperative weather. As the dust settles from the 151st edition, Churchill Downs sets its sights on 2026, aiming to grow what is already one of the most lucrative and celebrated events in American sports.

Just ahead of the schedule for the prestigious Kentucky Derby, Caesars Sportsbook has just announced that it has now added pari-mutuel horse race betting to its app in both Kentucky and Colorado. The Caesars Sportsbook app will begin offering sports betting with live streaming as well as single-account horse race betting.

In a major development for horse racing and sports betting enthusiasts, Caesars Entertainment has integrated pari-mutuel horse race wagering into its Caesars Sportsbook app, just in time for the 2025 Kentucky Derby. The integration, now live in Colorado and Kentucky, allows users to seamlessly switch between traditional sports betting and horse racing within a single platform - delivering a more streamlined and enriched experience for bettors.

This update blends Caesars' top-tier sportsbook with the robust horse racing functionality of Caesars Racebook, powered by NYRA Bets. The rollout offers customers in the two states a unified betting experience, complete with a shared wallet and live-streaming access to races from over 300 race tracks worldwide.

Seamless integration elevates user experience

The new functionality brings sports and horse racing wagering together under one digital roof, a move that Caesars calls a "significant milestone" in both digital gaming and the evolution of horse race betting. Customers in both Colorado and Kentucky can now enjoy a simplified experience that combines daily racing action with major sporting events, all while earning Caesars Rewards - the company's signature loyalty program.

"Integrating pari-mutuel horse racing into the Caesars Sportsbook app is a significant milestone for both our digital business and the sport of horse racing," stated Senior Vice President and Chief Development Officer at Caesars Digital, Dan Shapiro. "Now, our product seamlessly puts the action directly in front of an expanded audience and reinforces Caesars' commitment to horse racing."

A boost for fan engagement and the sport of racing

The new shared wallet system allows users to fund both sports and horse race bets without switching apps or accounts. Through this innovation, Caesars is aiming to attract a broader audience and enhance engagement with the sport.

"Horse racing plays an important role in the betting marketplace, and we appreciate Caesars' longstanding commitment to elevating the sport and growing fan engagement," stated NYRA Bets President Tony Allevato. "Launching the shared wallet functionality allows Caesars Sportsbook to provide its large customer base with premier racing content through a comprehensive and easy-to-access wagering menu."

With this integration, users will also gain access to in-app statistics, handicapping data, and live streaming of races from top-tier tracks like Aqueduct, Gulfstream Park, Saratoga, and Santa Anita, in addition to Caesars race tracks including Harrah's Hoosier Park and Horseshoe Indianapolis.

National reach and continued expansion plans

While the integration is currently available in Kentucky and Colorado, Caesars Racebook remains accessible as a standalone app in 20 other US states including New York, California, and Florida. Caesars also has long-term ambitions to expand the integrated functionality across more jurisdictions as regulatory approvals are secured.

This latest move cements Caesars' long-standing commitment to horse racing. The company is the presenting sponsor of the prestigious National Horseplayers Championship at Horseshoe Las Vegas and operates several race tracks across the country.

Access and availability

Individuals aged 21 and older in jurisdictions where sports betting is legal can download the Caesars Sportsbook app on iOS, Android, or access it via desktop. The app now offers one of the most comprehensive and user-friendly platforms for both sports and horse race betting in the US.

As the racing world gears up for the Kentucky Derby, Caesars' dual-wagering feature is poised to bring the thrill of the track and the sportsbook together like never before. This integration not only enhances the betting experience but also signals a promising future for horse racing in the digital era.