Stuff like this has been going on for years and years. The only difference is that for years the kids all worked it out themselves. They either quit being friends or became best friends. Sorry to say, but today kids are not allowed to handle things themselves. They expect Mom to handle problems. So if it is a problem, tell them they cannot play together anymore. This, however, is not bullying. It is normal kid stuff.
You’ve let your kid play with them for YEARS??? I’m so sorry for your son.
WHY?? it’s easy, you “send” them out to play.
Sounds like you’re too lazy to get your kid away from these terrible kids.
Sorry this is on you,
you cant change your neighbor’s kids but you can get your kids away from them by saying No you cant play with them and yes I’ll arrange a play date with someone decent.
I wonder where your kids learned to not stick up for themselves? Um…YOU! Kids need to know that it is ok to stand up for themselves as long as they are not being physically or verbally aggressive/mean. Why would you allow your children to play and spend time with others who are consistently verbally abusive and racist? YOU are subjecting them to this by allowing it. Take some control of your family, do not let the other kids drag them off. They are NOT their friends. Talk to your children about what a friend is and acts likes. Ask the if these kids are acting like a friend? Help them make the conclusion that they should not continue to interact with them if they treat them this way. Do you want your kids to grow up letting other walk all over them? Do you want them to become victims of abuse as children or adults?
Step up n say something to the mom. But remember what we think stinks most ont and ruins relation ships I went tough this similar situation when my daughter was 7 unfortunately she lost a friend I lost of friend they say there down to earth people but there not there all for themselves. You really need to be careful on wording your concerns or it will lap you back. Good luck!
You won’t always be there when your kid needs help. I find it best to teach my kids what to say. The most basic thing is, when they come to the door and ask your son to play ask him in front of them. Do you want to go play at the neighbors house? Talk with him before hand and let him know that it is ok to say no. That you don’t have to play with others who are not nice. Those kids are not nice and he does not have to go play with them. When the kids say, how come? Let him tell them that he feels that they don’t play nicely. Or he could say, can we take turns deciding what to play? He doesn’t always have to do what they want to do, and they shouldn’t have to do what he always wants to do.
Also, there’s always two sides to every story. If you talk with the other mom, which you have to be very careful about since you are neighbors, I’d ask her questions such as: Do your kids ever say anything about my son not playing nicely? Do they seem to get along when they are over here? That could lead into hmm well my son has been saying such and such and I was just concerned.
Another way to help this along is to have them to your house so that you can teach them all how to play correctly. Some kids learn on their own, but others (most) really need to be taught how to compromise, share, and take turns choosing activities.
Good luck. These situations are so tough to deal with. That’s why I try to give my children the tools to deal with it on their own. Some day, they’ll remember what I say to help them in situations they’re uncomfortable in..hopefully. 
Thanks for the responses. Appreciate it. I will plan on telling his mom about it. Sandy - thanks for your suggestion, but I am not a lazy person nor the kids played for years but just for the last few months. I am used to being good to the neighbours around just to have that sense of a community. People need each other in times of crisis. As I mentioned, the kids drag mine to their home. They literally beg every evening to let them play. I don’t send him just because it is easy for me, infact I hate it. But I am going to open up soon to the mom or stop the play time. Thanks again for the responses, ladies.