Tax rules had a significant impact on handle at this year's Breeders' Cup World Championships at Del Mar

Tax rules had a significant impact on handle at this year's Breeders' Cup World Championships at Del Mar

Del Mar Thoroughbred Club

November U.S. Handle Up 6.39% Due to New Tax Rules

Total wagering exceeded $890.8 million, with average handle per race day up 9.7%.

Changes in the withholding and reporting of pari-mutuel proceeds is having the positive impact on the national handle that Thoroughbred industry leaders had expected.

Wagering on U.S. races grew 6.39% to more than $890.8 million in November compared with the same month of 2016. Average wagering per race day increased 9.7% to $2,766,534 for November compared with the same month a year ago, according to figures released Dec. 7 by Equibase.

Under the new regulations approved in September, the IRS now considers the inclusion of a bettor's entire investment in a single pari-mutuel pool when determining the amount reported or withheld for tax purposes, as opposed to only the amount wagered on the correct result.

For example, the amount wagered by a Pick Six player who hits with one of 140 combinations on a $1-minimum wager now will be $140, which is the total amount bet into the Pick Six pool. This more accurate calculation will remove the significant reporting and withholding obligations on horseplayers and the unnecessary paperwork for the IRS that was a result of the prior rule, which used only the $1 bet on the single winning combination as the amount wagered.

The impact was significant at this year's Breeders' Cup World Championships Nov. 3-4 where, despite some of the longest-priced winners in Breeders' Cup history, only 35 winning tickets at Del Mar triggered IRS reporting or withholding via automatic W-2G filings across the two-day event. That represented a 97% reduction from the previous year, when 1,333 W-2G filings occurred on-track at the host site. With more money in their pockets, bettors are in turn are churning more through additional wagers.

The U.S. Treasury Department and IRS adopted modernized regulations regarding the withholding and reporting of pari-mutuel proceeds due to lobbying by the National Thoroughbred Racing Association (NTRA) on behalf of the Thoroughbred industry. 

Thoroughbred Racing Economic Indicators

 

For November 2017

 

Nov.. 2017 vs. Nov. 2016

 

Indicator

Nov. 2017

Nov. 2016

% Change

Wagering on U.S. Races*

$890,823,840

$837,308,933

+6.39%

U.S. Purses

$101,798,604

$101,378,895

+0.41%

U.S. Race Days

322

332

-3.01%

U.S. Races

2,752

2,788

-1.29%

U.S. Starts

22,693

23,106

-1.79%

Average Field Size

8.25

8.29

+1.70%

Average Wagering Per Race Day

$2,766,534

$2,522,015

+9.70%

Average Purses Per Race Day

$316,145

$305,358

+3.53%

 

 

 YTD 2017 vs. YTD 2016

 

Indicator

YTD 2017

YTD 2016

% Change

Wagering on U.S. Races*

$10,159,447,452

$10,016,110,223

+1.43%

U.S. Purses

$1,015,336,772

$1,022,786,990

-0.73%

U.S. Race Days

4,298

4,391

-2.05%

U.S. Races

35,269

35,935

-1.85%

U.S. Starts

270,953

278,809

-2.82%

Average Field Size

7.68

7.76

-0.98%

Average Wagering Per Race Day

$2,363,762

$2,281,0548

+3.63%

Average Purses Per Race Day

$221,136

$217,896

+1.49%

 

 

YTD 2017 vs. YTD 2016

 

Indicator

YTD 2017

YTD 2016

% Change

Wagering on U.S. Races*

$8,505,157,017

$8,388,747,833

+1.39%

U.S. Purses

$823,544,224

$819,517,147

+0.49%

U.S. Race Days

3,621

3,685

-1.74%

U.S. Races

29,559

30,026

-1.56%

U.S. Starts

224,297

230,390

-2.64%

Average Field Size

7.59

7.67

-1.11%

Average Wagering Per Race Day

$2,348,842

$2,276,458

+3.18%

Average Purses Per Race Day

$236,235

$232,928

+1.42%

 

* Includes worldwide commingled wagering on U.S. races.