Keeneland director of mutuels and simulcasting Jim Goodman said several big winners at this year's fall meet have lingered at the window, expecting they'd be needed to provide additional information for the Internal Revenue Service.
Those moments of confusion resulted in a happy lesson for those winning horseplayers, who were quickly informed they wouldn't need to provide information to the IRS thanks to new rules on withholding and reporting reducing instances of both.
The NTRA championed the changes that were updated by the United States Treasury and IRS this year. The changes, which tracks and advance-deposit wagering outlets began putting in place Sept. 28, alter the way the 300-1 odds threshold is determined in big payoffs. In the first few weeks in place, the changes have significantly reduced the instances of withholding and reporting winnings.
Officials at Keeneland and the New York Racing Association both reported these changes, updates that base odds on the entire cost of a ticket, have greatly reduced the instances of both reporting—necessary on payouts above $600 at odds of at least 300-1—and withholding—needed on payouts above $5,000 at odds of at least 300-1.
Goodman said that through the first nine days of the Keeneland meet, the track processed 14 IRS tickets, compared with 522 during the first nine days last year. He said Keeneland's ADW, Keeneland Select, had not processed a single IRS ticket in October after processing 146 last year.
The changes are reducing paperwork for tracks and, most importantly in terms of withholding, keeping money in players' hands. Will Alempijevic, director of business development for NYRA, said the withholding changes added about $23,000 for bettors at Belmont Park and simulcast players at Aqueduct from Sept. 28 to Oct. 16.
Alempijevic said using the previous standards, those two outlets would have withheld $27,133 from 13 winning tickets. Under the new standards, the two outlets withheld $4,235 from just two winning tickets, a difference of $22,898 retained by players. Alempijevic added that reportable winnings would have been required with 319 tickets under the old system but had fallen to 17 under the new standards.
Matthew Feig, senior director of NYRA's ADW, NYRA Bets, said they've seen a 98% reduction in eligible "signers." He noted that players enjoy that all of their bets into a single wagering pool on a race are considered in the ticket's total cost, used to determine the 300-1 odds.
"On the day we announced that we were compliant, we received emails and reactions from players. They were ecstatic," Feig said. "They were happy that we were up and running on day one. They all thought it would impact their play in a positive manner."
Alempijevic said it was too early to estimate an impact of the changes on handle but it is something he is tracking.