DEPARTMENT OF TREASURY AND IRS ISSUE PROPOSED REGS TO MODERNIZE PARI-MUTUEL WITHHOLDING AND REPORTING

The Department of Treasury and Internal Revenue Service (IRS) today issued newly proposed regulations relating to withholding and reporting with respect to pari-mutuel winnings. The 31-page Treasury document, entitled “Withholding on Payments of Certain Gambling Winnings,” accomplishes the goals started and spearheaded by the NTRA more than two years ago. The effort to this point has included meetings between the NTRA and Treasury and IRS officials, visits to Washington by horseplayers, grass roots campaigns and direct contact involving thousands of industry stake holders, including bettors, as well as involvement by numerous Members of Congress, Governors and other elected officials.

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. The proposed regulations would have the same positive results for Advance Deposit Wagering (ADW) customers and would not impact how those wagers are currently made.

The proposed regulations will positively impact a significant percentage of winning wagers, particularly those involving multi-horse or multi-race exotic wagers, and result in tens of millions of dollars in additional pari-mutuel churn.

The proposed regulations will undergo a 90-day comment period and it is conceivable that they could be in place prior to the 2017 Triple Crown. As was the case during a similar comment period in 2015 that attracted nearly 12,000 comments, the NTRA next week will establish a convenient and simple method for industry stakeholders to encourage enactment of the proposed regulations.

In its 31-page rulemaking document, the Treasury and IRS cited numerous specific examples provided by the NTRA as reasons for the need to modernize and also referred to the many comments it received from individuals in support of the proposed changes.

“This is a tremendous step forward in our ongoing efforts to modernize pari-mutuel regulations to accurately reflect today’s wagering environment,” NTRA President and CEO Alex Waldrop said. “The NTRA remains thankful to everyone who has engaged in this process, including numerous industry stake holders, horseplayers, Members of Congress, Governors and other elected officials, especially Congressmen John Yarmuth (D-KY) and Charles Boustany (R-LA), who led the congressional effort. A unified message has gotten us to this point and we encourage everyone to continue to work through the channels we will be establishing as we seek to push these proposed regulations across the goal line.”

The complete Treasury and IRS rulemaking document is posted on NTRA.com and can be accessed here.

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Comments

  1. Its a positive move that will greatly reduce the tax impact on winnings

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