Twelve Congressmen Sign Letter Urging Treasury To Enact Recently Proposed Tax Reporting, Withholding Regulations

LEXINGTON, Ky. (Wednesday, April 12, 2017) – Twelve members of Congress from a number of key racing states have signed a letter delivered to the Department of Treasury requesting that recently proposed Internal Revenue Service (IRS) regulations relating to the way pari-mutuel winnings are calculated for tax withholding and reporting purposes be finalized as soon as possible.

The letter was in response to actions taken by the Treasury and Internal Revenue Service (IRS) in late December when the Treasury issued proposed regulations relating to withholding and reporting of pari-mutuel winnings. The 31-page Treasury document, entitled “Withholding on Payments of Certain Gambling Winnings,” accomplishes the goals championed by the NTRA nearly three years ago to modernize regulations related to pari-mutuel winnings. The proposed regulations will positively impact a significant percentage of winning wagers, particularly those involving multi-horse or multi-race wagers, and are expected to result in tens of millions of dollars in additional pari-mutuel wagering.

The proposed regulations clarify ‘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 totalizator ticket if the wager is placed onsite or through a single account if the wager is placed electronically.

The letter, which garnered bipartisan support, was co-authored by Rep. John Yarmuth (D-KY) and Rep. Patrick Meehan (R-PA). The additional signatories are Rep. Andy Barr (R-KY), Rep. James Comer (R-KY), Rep. Brett Guthrie (R-KY), Rep. Donald Norcross (R-NJ), Rep. Devin Nunes (R-CA), Rep. Bill Pascrell Jr. (D-NJ), Rep. Hal Rogers (R-KY), Rep. Thomas Rooney (R-FL), Rep. Kurt Schrader (D-OR), and Rep. Paul Tonko (D-NY).

“As you know, these regulations would update existing Treasury rules (Treas. Reg. Sec. 31-3402(q)-1) governing the reporting and withholding of certain pari-mutuel wagers. These rules have not been updated since the 1970s and we were pleased that Treasury responded to our requests to bring these regulations up to date,” the Congressmen wrote in a letter dated April 4, only days after a 90-day public comment period concluded. “The proposal better reflects the current pari-mutuel wagering environment and will lead to increased compliance while reducing burdensome paperwork, creating an overall system that will be more accurate and equitable for taxpayers.

“We look forward to these modernized rules being fully implemented and request that you act on this matter as quickly as practicable,” the letter concluded.

A copy of the full letter can be accessed at the following link: https://www.ntra.com/wp-content/uploads/2017.04.04-Treasury-Pari-Mutuel-Winnings.pdf

“There is widespread agreement that these newly proposed Treasury regulations will reduce burdensome paperwork while creating a new system that is more accurate and equitable for taxpayers,” said NTRA President and CEO Alex Waldrop. “Throughout this process, the issue has received bipartisan support from members of Congress and we thank Representatives Yarmuth and Meehan, along with the other co-signatories, for leading the effort to modernize these regulations related to pari-mutuel winnings.”

About the NTRA

The NTRA, based in Lexington, Ky., is a broad-based coalition of more than 100 horse racing interests and thousands of individual stakeholders consisting of horseplayers, racetrack operators, owners, breeders, trainers and affiliated horse racing associations, charged with increasing the popularity, welfare and integrity of Thoroughbred racing through consensus-based leadership, legislative advocacy, safety and integrity initiatives, fan engagement and corporate partner development. The NTRA owns and manages the NTRA Safety and Integrity Alliance, NTRA.com, the Eclipse Awards, the National Handicapping Championship, NTRA Advantage, a corporate partner sales and sponsorship program, and Horse PAC, a federal political action committee. NTRA press releases appear on NTRA.com, Twitter (@ntra) and Facebook (facebook.com/1NTRA).

NTRA Keeping Busy on Tax Withholding, Reporting Changes

NTRA Keeping Busy on Tax Withholding, Reporting Changes

When it comes to making industry favorable changes on tax withholding and reporting of pari-mutuel winnings a reality this year, the National Thoroughbred Racing Association is continuing its efforts to what it hopes will be a successful finish, while working with the industry to make sure it will quickly transition to the new rules.

While the United States Treasury will not say much either way during the current 90-day comment period that runs through the end of the month, in December it issued a 31-page document that clarifies the total bet amount on a ticket will be used to determine the 300-1 threshold in reporting and withholding of large winnings.

Currently a $1 trifecta wheel of 10 combinations is viewed as 10 bets of $1 each. If a payout of $600 or more at odds of 300-1 or higher is awarded, that payout must be reported to the IRS. If that same wager pays $5,000 or more on odds of 300-1 or higher, some of the winnings must immediately be withheld for taxes.

The change would affect how the 300-1 threshold is determined. Under the change, the $10 ticket in the scenario above would be considered a $10 wager. To reach 300-1 odds, the payout must be more than $3,010, which means far fewer big payouts will need to be reported.

While the December report was favorable, the NTRA is working to make sure the changes clear any final hurdles while also acting to make sure horse racing will be ready to act should the changes become official.

During the 90-day comment period, the NTRA again called on the industry to show its support through e-mails in support of the change. The NTRA reports that virtually every comment submitted to the Treasury has been supportive of the proposed regulatory changes, and there appears to be no organized opposition to the updates.

Also, the NTRA is actively seeking the support of a bipartisan group of members of Congress from key racing states to urge the Treasury to finalize the changes in a timely manner once the public comment period concludes March 30. While nothing is guaranteed, it is expected to take a month to 45 days to become official after the public comment period closes.

The NTRA is leading the way on making sure the industry is ready to put the changes in place.

“We’re determined to implement this new tax structure on Day One without a hitch,” said NTRA president Alex Waldrop. “There are a lot of moving parts but fortunately everybody is working together. We have a broad cross-section of the industry, technology providers who are familiarizing themselves with the (regulations). We’re very optimistic.”

The NTRA continues to engage with its lobbyists in Washington, as well as major tote companies, racetrack operators, and ADWs—both individually and as a group—to outline an implementation plan for the proposed rules. Just last week, the NTRA led a conference call that included officials from tote companies AmTote, United Tote, and Sportech; as well as the Las Vegas Dissemination Company, William Hill, TVG, Thoroughbred Racing Associations, and the Thoroughbred Racing Protective Bureau, among others.

Tote companies would update their software to recognize the new definition of how the 300-1 threshold is determined.

“The collaboration around this effort is unprecedented and we are confident that we will be prepared to implement these important regulatory changes as soon as the new regulations become law,” said NTRA chief operating officer Keith Chamblin.

The NTRA also plans additional communication and education for horseplayers. A big part of that will be emphasizing the potential advantages of including multiple wagers on a single ticket.

“We realize that there may be a period of adjustment for customers as they gain a better understanding of the benefits derived from the new regulations,” Chamblin said. “A customer communications plan already is under way and will continue well after the proposed regulations become law.”

NTRA Establishes Process for Urging Treasury to Enact Proposed Pari-Mutuel Regs

The National Thoroughbred Racing Association (NTRA) today announced that a system has been established at https://www.ntra.com/comment for individuals to submit an e-mail comment directly to the United States Treasury Department in support of newly proposed regulations related to withholding and reporting of pari-mutuel winnings.

The proposed regulations, which would replace outdated regulations adopted nearly 40 years ago, more accurately reflect today’s pari-mutuel wagering environment and will positively impact a significant percentage of winning wagers, particularly those involving multi-horse or multi-race exotic wagers. It is believed that the proposed changes will result in tens of millions of dollars in additional pari-mutuel wagering annually. If adopted, the new regulations will not only  promote greater compliance and more accurate reporting and withholding by taxpayers but also reduce burdensome and needless paperwork system-wide.

Efforts spearheaded by the NTRA on behalf of the industry over the past two and a half years came to fruition on December 30 when Treasury and the Internal Revenue Service (IRS) published proposed guidelines designed to modernize withholding and reporting regulations. The 31-page Treasury document, “Withholding on Payments of Certain Gambling Winnings,” clarifies the phrase “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.

In the NTRA’s official response to Treasury on behalf of the industry, submitted Wednesday, NTRA President and CEO Alex Waldrop thanked the Treasury and IRS for recognizing the need to modernize regulations related to the withholding and reporting of pari-mutuel winnings and noted that the newly proposed regulations sufficiently address the industry’s concerns. Waldrop asked the Treasury and IRS to enact the new regulations as quickly as possible following a 90-day comment period that concludes on March 30.

“With horseracing’s all-important Triple Crown season fast approaching, the NTRA urges Treasury and the Service to adopt the proposed regulations as final regulations as soon as it is administratively feasible. Horseplayers, tracks and other industry stakeholders, including governments, are eager to begin reaping the benefits that will result from these updated withholding and reporting rules,” Waldrop said.

The public comment system at NTRA.com/comment provides each commenter with a clear, consistent message asking Treasury to adopt the proposed regulations and urging prompt action.

“A unified message of support is critical as the industry urges Treasury and the IRS to finalize the proposed regulations,” Waldrop added. “We ask all who participate in the horse racing industry to submit a comment to Treasury and the IRS using the NTRA system so that we can send the message loud and clear that all of horse racing supports these changes.”

March Economic Indicators: U.S. Wagering Up Slightly; Purses, Race Days Decline

by  | 04.05.2016 | 12:57pm

 

Total wagering increased in the U.S. in March, while purses, race days and starts were down slightly from their 2015 levels, according to economic indicators released Tuesday by Equibase.

Wagering in the U.S. was up 0.85% in 2016 as compared with the same month last year. Year-to-date figures were also up, 3.07%

Purses for March 2016 showed a decline, down 4.90% as compared with 2015, while year-to-date they were also down, 2.60%.

The number of race days decreased this year, down 9.04%, compared to March 2015. Year-to-date, race days dropped 7.43%.

The number of races in the U.S. also declined, down 8.47%; year-to-date figures showed a decline of 5.82%.

Lastly, the number of starts in March 2016 showed a decline, down 6.72%; year-to-date figures were also down, 4.05%.

Charts Courtesy Equibase

March 2016 vs. March 2015
Indicator March 2016 March 2015 % Change
Wagering on U.S. Races* $854,900,215  $847,700,697 +0.85%
U.S. Purses $72,038,600  $75,750,051 -4.90%
U.S. Race Days 302  332 -9.04%
U.S. Races 2,603  2,844 -8.47%
U.S. Starts 20,520  21,998 -6.72%
 
YTD 2016 vs. YTD 2015
Indicator YTD 2016 YTD 2015 % Change
Wagering on U.S. Races* $2,498,295,980  $2,423,926,336 +3.07%
U.S. Purses $197,361,190  $202,632,295 -2.60%
U.S. Race Days  847 915 -7.43%
U.S. Races  7,282  7,732 -5.82%
U.S. Starts  59,628  62,142 -4.05%
* Includes worldwide commingled wagering on U.S. races.