Stop Subsidizing the 'Sport of Kings'

Plus: A ridiculous tax carveout, Trump backs D.C. stadium, and Shedeur Sanders

Good morning and welcome to another edition of Free Agent! Watch your mouth with your teammates at work today, because language like this probably isn't going to fly.

Amid a wild sports weekend, you may have missed that it's Kentucky Derby week. Click here to see the field and choose your rooting interests based on name or trainer. (Journalism and Publisher aren't doing it for me, despite my profession.) We'll also talk about one of the dumbest sports-related tax carveouts you'll ever see, Shadeur Sanders sliding down the draft board, and an update on a new NFL stadium for the Washington Commanders.

Locker Room Links

• The review of the concrete at Philadelphia's Citizens Bank Park that you never knew you needed.
• Wrexham has made it up to English soccer's second division under celebrity owners Rob McElhenney and Ryan Reynolds—could they really make it up to the Premier League?
• "Inside the Wild Rise of the Savannah Bananas"
• Competition between multiple U.S. women's soccer leagues is heating up.
• The University of Kentucky is turning its athletic department into an LLC business.
• Elsewhere in Reason: "How Tariffs Could Cause Shortages in American Stores"
• The Eagles went to the White House on Monday, and Reason's resident superfan Natalie Dowzicky was on hand. Saquon Barkley was present, but notable absences included Jalen Hurts, A.J. Brown, Devonta Smith, and Brandon Graham.
  

  Trump has already called all the @Eagles players "big people" 8 times. pic.twitter.com/GWNDOrvkKi

  — Natalie Dowzicky (@Nat_Dowzicky) April 28, 2025

Subsidizing the Sport of Kings

Horse racing must be one of the most subsidized sports in the country.

The sport used to garner huge crowds year-round, but now, aside from the Triple Crown races and the Breeders Cup, huge crowds are rare. Yet despite dwindling interest, prize payouts are still high. Turns out there's still plenty of money in the industry—because like any other flailing industry with cultural power, the sport's power brokers turned to the government for help.

There are federal tax benefits for racehorses (although there's a chance they might soon expire) and some states exempt racehorses from their sales taxes. Other states own the racetracks. A major advantage bestowed by governments has been slot machine revenue.

Many states with strict gambling and casino regulations passed laws with carveouts allowing slot machines at horse racing tracks. (To be fair, I think this should be allowed, but it should be allowed everywhere from casinos to racetracks to your local neighborhood Applebee's, if it so chooses.) Racetracks jumped at the opportunity for revenue, but the deals have turned horse racing into a sideshow for the main attraction: slots. It's made horse racing into a "shell industry," as Noah Shachtman wrote in an excellent New York Times essay on this topic, "with Potemkin tracks running races as a pretext for the real business next door."

The deals also require tracks to run more and more races. Yonkers Raceway in New York has "eight to 12 races per evening, 240 nights per year, seven or more horses to a race," Shachtman reported, and track owner MGM Resorts "loses up to $25,000 on every racing day." Racing so often has consequences: Though the number has been falling, hundreds of racehorses die every year.

"The sport of kings," as it's historically been known, is an industry for the rich, even if there's more money now in bigger sports. Horses in this year's Kentucky Derby have sold for six and seven figures. The average annual cost of caring for a racehorse is $75,000, according to advocacy group Light Up Racing, while annual earnings are less than $30,000—only 8 percent of horses win enough prize money to cover their costs. People who invest in horse racing anyway do it out of passion, the group says—a passion I don't think the rest of us should be forced to subsidize.

"The obvious solution here is also the simplest: Just stop," Shachtman wrote. "Let the sport stand on its own and dwindle to whatever size its fan base supports. Instead, state legislatures keep funneling money to it."

The Dumbest Tax Carveout

All those horseracing subsidies are dumb, but are they as dumb as exempting name, image, and likeness (NIL) payments from income taxes?

Arkansas amended its NIL law to allow schools to directly pay athletes—it also exempts those payments from state income tax and makes the contracts confidential.

What a nice tool that will be in recruitment. Come play at Arkansas. You won't have to worry about handing over 3.9 percent of your income to state taxes. It's a lot better than losing up to 12.3 percent in state taxes to play at UCLA, to be fair, and the argument will probably at least have a little sway in NIL negotiations—the effects of state taxes on free agent choices are well documented. (And yes, in my opinion, the less the government takes overall in taxes, the better.)

But college athletes are no more deserving of an income tax exemption than anyone else. The exemption won't cost the state budget much in terms of lost revenue, but teachers, truck drivers, and Walmart greeters will have to pay that much more to make up for it. 

Do you know where they won't be introducing state income tax exemptions? The nine states with no income tax. Maybe Arkansas should go that route instead.

Commander-in-Chief Backs Commanders

The Washington Commanders and Washington, D.C.'s mayor officially unveiled the stadium plan we discussed last week. Last week, the plan initially seemed to include $850 million in government funds, but that number is now more than $1 billion promised (at this rate, D.C. will be on the hook for $10 billion before they even break ground). That brings the project awfully close to Nashville's record-breaking $1.26 billion subsidy for a new Tennessee Titans stadium. Like Nashville, the local Washington, D.C., government will own the stadium and lease it to the Commanders.

While some headlines make it seem like a done deal, the project still needs to be approved by the D.C. Council, which has more opposition than you might expect. Hopefully in the course of their due diligence they'll try to get some architectural renderings that actually make sense. Another possible roadblock was Congress, but with President Donald Trump announcing his full support, it seems unlikely Republicans are going to push back on the project (nor will Democrats who I assume will be deferential to D.C.'s government). Trump seems to have bought into the delusion that stadium subsidies pay for themselves, posting that the stadium will "boost Economic Development, create more Jobs and, hopefully, lead to less Crime in the area."

Boo Commanders. Boo owner Josh Harris. Boo Trump.

Shedeur-enfreude

While a lot of people seemed to enjoy the personal downfall of Shedeur Sanders, I was more interested in the chaos of a supposed top-five pick falling to the third day of the draft. I've tried to understand what happened, and I'm pretty sure Trump wasn't involved, but it seems to be a mixture of overrated skills (sorry, Mel Kiper!), bad interviews, and more that snowballed into a long slide down the draft board.

Thankfully, this debate can be settled on the field. If a humbled Sanders can recover from this embarrassment and have a successful NFL career, good for him. But the Cleveland Browns have an awful track record of judging and developing quarterbacks. They seem to think having five quarterbacks means one of them has to eventually turn out well, right?

Sanders' base contract will be worth just $4.6 million over four years—less than what he would have made had he stayed in college and worse than the average NHL player. Maybe he should try hockey instead?

Replay of the Week

It's been a truly bonkers few days in sports. Someone stole home. There was a walk-off inside-the-park solo home run thanks to two errors. A playoff hockey team went from losing to winning in 11 seconds. There was a kick-six! But there can only be one official replay of the week, and it goes to the first game-winning, buzzer-beating dunk in the modern NBA playoffs, possibly ever?

AARON GORDON DUNK AT THE BUZZER FOR THE NUGGETS WIN!!! ????????

ONE OF THE CRAZIER ENDINGS YOU'LL SEE ????????#TissotBuzzerBeater#YourTimeDefinesYourGreatness pic.twitter.com/BVdHdAEP1Q

— NBA (@NBA) April 27, 2025

If it were different by a single frame in either direction, we'd be almost 100 percent sure what the call should have been. Truly insane how close this was.

That's all for this week. Enjoy watching the real action of the week, the National Collegiate Beach Volleyball Championship.