Posted: Sept. 25, 2017
Modernized regulations for pari-mutuel withholding and the reporting of proceeds from winning wagers will be adopted by the United States Department of Treasury and Internal Revenue Service, the National Thoroughbred Racing Association said Sept. 25.
The NTRA has been lobbying for the tax changes for several years. It said the changes, which according to “independent estimates” could increase pari-mutuel handle by $1 billion per year, will take effect no later than Nov. 14; the organization said some wagering outlets may implement the changes as soon as Sept. 27.
“These landmark U.S. Treasury regulations will have an enormously positive impact on horseplayers, the racing industry, and the federal government,” NTRA President and Chief Executive Officer Alex Waldrop said. “I am extremely proud of the NTRA’s legislative team for spearheading this effort, which will prove to be among the most meaningful regulatory advances made by our industry in decades.
“The results of this much-needed measure will be horseplayers keeping more of their winnings, racetracks generating more pari-mutuel handle, and government collecting additional tax revenue.”
Under the new regulations, the IRS will consider the inclusion of a bettor’s entire investment in a single pari-mutuel pool when determining the amount reported or withheld for tax purposes, as opposed to only the amount wagered on the correct result.
The amended regulations, advocated by the NTRA and its legislative team, define the “amount of the wager” to include the entire amount wagered into a specific pari-mutuel pool by an individual—not just the winning base unit as is the case today—so long as all wagers made into a specific pool by an individual are made on a single tote icket if the wager is placed onsite. The modernized regulations will have the same positive results for advance deposit wagering customers and will not impact how those wagers are currently made.
(Photo courtesy U.S. Department of Treasury)