New Federal Legislation Defining Games Of Chance Also Seeks To Abolish The IRS
CardPlayer.com Poker is widely considered a game of skill , and a federal court found that to be the case in 2012. Moran’s legislation is apparently separate from forthcoming sports betting legislation from New Jersey Congressman Frank Pallone, a Democrat.
The National Thoroughbred Racing Association (NTRA) has 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The proposed regulations, which would replace outdated regulations adopted nearly 40 years ago, more accurately reflect today’s pari-mutuel wagering environment and will positively impact a significant percentage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.
This will positively impact a significant percentage of winning wagers, particularly those involving multi-horse or multi-race exotic wagers.
“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 person with a clear, consistent message asking the 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.”
House Passes Appropriations Bill Encouraging Modernization of Pari-Mutuel Tax Rules – NTRA
Editor’s Note: We’d like to give a shout out to our friends Judy Wagner and Chris Larmey who were extremely instrumental in pitching the case for horseplayers to the representatives in Washington D.C. last year.
The U.S. House of Representatives approved the fiscal year 2017 Financial Services and General Government Appropriations bill Thursday evening that includes report language detailing Committee on Appropriations instructions for the U.S. Treasury to “expedite final consideration of the guidance which would modernize the rules governing pari-mutuel wagering.”
The bill (HR 5485) provides $21.7 billion in annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission, and other related agencies. A companion bill in the Senate containing identical “Guidelines for Pari-mutuel Winnings” has been passed out of committee and now awaits passage by the full Senate.
Language in the House Appropriations Committee Report reads:
Guidelines for Pari-mutuel Winnings.—The Committee appreciates the Department of the Treasury’s proposed rule (REG– 132253–11) published on March 4, 2015, along with the associated public hearing held on June 17, 2015. The Committee encourages the Treasury to expedite final consideration of the guidance which would modernize the rules governing pari-mutuel wagering.
“The House [has] passed a bill that prioritizes funding where it will be best used, and makes policy reforms that improve efficiency and accountability and rein in executive overreach,” House Appropriations Chairman and U.S. Representative Hal Rogers (KY) said.
Recent actions by the House and Senate are the latest in a concerted, industry-wide effort to modernize regulations relating to pari-mutuel winnings. Updates proposed by the NTRA would clarify regulations by redefining the “amount of the wager” to include all of a bettor’s investment into a single pari-mutuel pool, and not simply the base amount of the winning combination. The effort has received support from Members of Congress as well as all segments of the horse racing industry, including customers, who last year submitted nearly 12,000 comments to the Treasury and IRS in support of the proposed change.
“Modernization of tax regulations relating to pari-mutuel winnings is a top priority of the NTRA in Washington,” NTRA President and CEO Alex Waldrop said. “We appreciate the fact that the House recognizes the need to modernize pari-mutuel tax regulations that are outdated and burdensome. It is time for the Treasury to act.”
We all need to join the fight in D.C. to get the tax code to reflect today’s wagering and not outdated wagering limits from many decades ago. Only in Washington would it make sense that a $608 score on a wager that cost $540 would get taxed the full amount! Needless to say, it’s time for this archaic code to be changed in favor of horseplayers!
Use this form to send your message directly to policymakers in Washington, D.C. Let them know that you want modernization of the tax regulations relating to withholding and reporting of winning pari-mutuel wagers because the current method is unfair and outdated.
With regard to pari-mutuel wagering on horse racing, I am writing in response to the invitation by the Department of the Treasury and the Internal Revenue Service (IRS) for comments on amending the regulations under Treas. Reg. sec. 31.3402(q)-1.
Treas. Reg. section 31.3402(q)-1 needs to be modernized to ensure that both withholding and reporting of winnings from pari-mutuel wagering accurately and fairly reflect the realities of wagering today.
I respectfully request that the Treasury and the IRS amend Treas. Reg. sec. 31.3402(q)-1 to make it clear that the definition of the “amount of the wager” includes the total amount wagered by a bettor into a specific pari-mutuel pool for purposes of determining whether any wagering proceeds paid to the bettor from that pari-mutuel pool are subject to withholding and reporting.
I appreciate this opportunity to comment on Treas. Reg. sec. 31.3402(q)-1 in connection with the proposed regulation project (REG-132253-11).