Colorado’s last horse track, Arapahoe Park, says tax policy could close it

The only horse racing track in Colorado said it could close in the near future if a Centennial judge does not stop a state agency from reinterpreting its tax policy.

“It will be the death knell for horse racing in Colorado,” Arapahoe Park in Aurora said.

The track and the Department of Revenue have been at loggerheads since August 2021 over how much money the track is supposed to pay in taxes for wagers that are placed on Arapahoe Park races from out-of-state betting locations. The track said it receives only 3 percent of revenue from those bets, yet the state is trying to tax the track as if it received 100 percent of the revenue.

In May 2022, a temporary agreement was reached between DOR, Arapahoe Park and the Colorado Horse Racing Association, a trade group. That agreement allowed Arapahoe Park to pay taxes on only a small percentage of out-of-state bets, as it has for decades. With a signed agreement in place, the 2022 horse racing season went on as planned in Aurora.

The question now is whether there will be a season beyond 2023.

On May 9, the racetrack, which is owned by Rhode Island-based Bally’s and formally known as Bally’s Arapahoe Park, sued DOR. It said the 2022 agreement never expired, so DOR cannot enforce its higher taxes on out-of-state bets.

Shannon Gray, a DOR spokeswoman, declined to comment on the pending litigation.

Arapahoe Park is asking Arapahoe County Judge Thomas Henderson to issue a preliminary injunction that keeps the 2022 agreement in place indefinitely. Failure to do so threatens the track’s ability to turn a profit beyond this season, according to the lawsuit.

“Arapahoe Park must make a standalone profit to survive,” said Bally’s, which also owns casinos and online betting apps. “If it does not make money, it is going to disappear.”

Arapahoe Park opened briefly in the 1980s, then closed and reopened in 1992. It has been operating since. Its season runs from June to September, with races Saturday through Monday. It is responsible for several hundred jobs in Colorado, according to last week’s lawsuit.

Bally’s Arapahoe Park is represented by attorneys Tom Downey, Lidiana Rios and Paige Pashea with the Denver law firm Ireland Stapleton Pryor & Pascoe.

The Department of Revenue is represented by Assistant Attorney General Sarah Killeen.

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This story was reported by our partner BusinessDen.

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