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Scott Serio / Eclipse Sportswire

New York Gov. Kathy Hochul proposed penny breakage and a flat tax on betting handles in her state budget proposal.

BloodHorse reported that the budget proposal would simplify the state’s racing and pari-mutuel laws.

Under those laws, tax rates can vary by when a race is conducted or the type of race or bet, according to the report.

Hochul’s budget proposal would “create a simplified pari-mutuel tax rate structure” that includes eliminating the “outdated concept” of the breakage system, in which bettors’ winnings are rounded down, according to the report.

Kentucky changed to penny breakage in 2022, and Emerald Downs introduced it last spring.

Pat McKenna, vice president of communications for the New York Racing Association, told BloodHorse that “eliminating breakage is a common-sense step and one that NYRA strongly supports.”

Hochul’s budget proposal next will be considered by state lawmakers.