Saga of Susan Bala and Racing Services Takes an Incredible Turn

Horse racing business owed $13 million in collected taxes

Horse racing business Susan Bala owed $13 million in collected taxes.  The San Luis Obispo Tribune — The owner of a horse betting business in North Dakota says the state has agreed to pay her more than $13 million after her conviction for illegal gambling was overturned.

Source: Horse racing business owed $13 million in collected taxes

New Federal Legislation Defining Games Of Chance Also Seeks To Abolish The IRS

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.

Source: New Federal Legislation Defining Games Of Chance Also Seeks To Abolish The IRS

Easy Way for Bettors to Contact the United States Treasury Department

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.

Washington DC The proposed regulations, which would replace outdated regulations adopted nearly 40 years ago, more accurately reflect today’s pari-mutuel wagering environment and will positively impact a significant percentage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.”

Congressmen Urge Modernization of Pari-Mutuel Tax Rules

YARMUTH, BOUSTANY PEN JOINT LETTER TO TREASURY URGING ACTION ON MODERNIZATION OF PARI-MUTUEL TAX RULES

LEXINGTON, Ky. (Wednesday, July 13, 2016) Two U.S. congressmen, Rep. John Yarmuth (D-KY) and  Rep. Charles Boustany (R-LA), have submitted a joint letter to the U.S. Department of Treasury Secretary Jacob Lew urging finalization of proposed rule changes regarding withholding and reporting of pari-mutuel winnings.  The letter to Treasury was submitted on July 12 and was posted today on the official Twitter account of Rep. Boustany (@Boustany).

In the text, Yarmuth and Boustany highlight the bipartisan support the new guideline enjoys, as well as recent congressional activity on the matter and the pari-mutuel wagering industry’s economic imWashington DC smallpact. The letter concludes: “As you are well aware, it has been more than a year since the proposed rule was first published and, as such, we strongly encourage you to act on this matter by finalizing the proposed rule.”

A PDF file of the complete letter can be accessed here.

The letter comes on the heels of language in a House Appropriations Committee Report issued last week that accompanied House passage of the 2017 Financial Services and General Government Appropriations bill. That report instructed the U.S. Treasury “to expedite final consideration of the guidance which would modernize the rules governing pari-mutuel wagering.”

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. Ratification of the Senate appropriations bill would not result in the proposed rule changes becoming law; the IRS and U.S. Treasury must approve changes to their regulations.

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.

Horseplayers, Support the Change for Pari-Mutuel Tax Withholdings

Washington DC smallWe 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).

Sincerely,

Sign the Petition for the Issue on Pari-Mutuel Taxable Winnings

NTRA, KEY MEMBERS OF CONGRESS PUSH TO CLARIFY REGULATIONS REGARDING TAX REPORTING AND WITHHOLDING FOR PARI-MUTUEL CUSTOMERS

NEW YORK CITY (Tuesday, June 3, 2014) – The National Thoroughbred Racing Association (NTRA) today released a copy of a bipartisan letter from key members of Congress asking the Department of Treasury to clarify regulations regarding the way pari-mutuel winnings are calculated for tax purposes.

The NTRA is also calling on horse racing industry participants and customers to express their support of the effort by signing a Change.org petition available here: http://chn.ge/RXZ6DW.

The letter to the Secretary of the Department of Treasury was co-authored by Rep. Charles Boustany (R-LA) and Rep. John Yarmuth (D-KY) and co-signed by more than a dozen other congressmen.

The request for clarification urges the inclusion of a bettor’s entire investment in a single pari-mutuel pool to determine the amount reported or withheld for tax purposes, as opposed to only the amount wagered on the correct result. This issue typically arises in the context of increasingly popular exotic wagers.

For example, under the proposed clarification, the amount wagered by a Pick 6 player who hits with one of 140 combinations on a $1-minimum wager would be $140, which is the total amount bet into the Pick 6 pool. Currently the amount wagered is calculated using only the $1 bet on the single winning combination. By understating the amount wagered in this manner, the Internal Revenue Service is erroneously imposing significant additional reporting and withholding obligations on horseplayers. The clarification would directly benefit pari-mutuel customers by reducing burdensome tax obligations and allowing them to retain more of their winnings, some of which will likely be reinvested through increased handle.

The proposal also aims to lessen racing’s competitive disadvantage against other forms of gaming that have never been subject to such an aggressive tax ruling.

“Under an archaic IRS ruling currently in place, players’ winnings are being erroneously reported or withheld without regard for how much they actually wagered,” said NTRA President and CEO Alex Waldrop. “If granted, the clarification will allow horseplayers to keep more of their winnings, reduce the administrative burden on tracks and ADWs and ultimately generate more revenue for tracks, horsemen and government.

“We applaud congressmen Boustany, Yarmuth and others for their leadership and their awareness of the significant economic contributions that horse racing and breeding make in their states. We look forward to working with them on this important issue.”

Current guidelines regarding the calculation of pari-mutuel winnings for tax purposes are based largely on a 1978 ruling by the IRS that pre-dates the expansion of simulcasting and exotic wagering. However, that ruling, which was issued in response to an inquiry over a “box” wager totaling $6, is in conflict with Treasury regulations stating that wagers in the same pool shall be treated as one bet.

“This ruling appears to ignore the fact that even though the $6 box ticket represented the placing of a $1 bet on each of six different combinations, all of those wagered amounts were part of a single pari-mutuel pool,” the letter states.

Boustany and Yarmuth go on to explain the impact current regulations have on the racing industry:

Statistics show that each pari-mutuel dollar returned to the bettor in the form of winnings is re-bet seven times throughout the course of the day. Tax withholding reduces the amount of re-betting, which not only has an effect on the bettor and the track but also serves to reduce the collection of additional tax revenues that are paid by each racetrack operator on its net revenues. The ultimate adverse impact is a downward economic spiral for the industry with reduced purses, less wagering, less tax and economic benefit to localities and states and job losses at tracks, farms, breeding operations and related entities.

A copy of the full Boustany-Yarmuth letter, which is expected to attract additional signatures from Democrats and Republicans alike, can be accessed here: http://www.ntra.com/media/8717067/Treasury%20Pari-Mutuel%20Ltr.pdf