Taxes and Wagering
Taxes and Wagering
TwinSpires Embraces New Tax Rules
Changes will go into effect Thursday on nation’s largest mobile betting platform
Louisville, Ky. (Sept. 26, 2017) – TwinSpires.com has implemented changes that will go into effect on Thursday, Sept. 28, to coincide with modernized regulations that the U.S. Treasury Dept. and Internal Revenue Service agreed to adopt earlier in the week.
TwinSpires is the largest mobile betting operator in the United States and the official betting partner of both the Kentucky Derby and the Breeders’ Cup World Championships. Its quick compliance with the new regulations, which the National Thoroughbred Racing Association worked tirelessly to implement, will ensure as much money as possible stays within racing’s economy.
“This is a very big win for horseplayers and for pari-mutuel wagering on horse racing,” TwinSpires President Ted Gay said. “The NTRA has estimated the changes could increase wagering on U.S. horseraces by as much as $1-billion per year.”
The updated regulations keep in place the threshold of reporting to the IRS gambling winnings of 300-to-1 that pay at least $600, but change the cost of the bet from the base unit to the total amount wagered. The regulations also apply to the automatic withholding threshold of $5,000 on a 300-to-1 return.
“The reduction of wagering dollars withheld from circulation means more money for our players, which means more handle for the industry, our partner tracks, and horsemen,” Gay said. “These changes will improve the economics of the sport at every level.”
TwinSpires will continue to provide detailed accounting for all players, including issuing W2G statements when required. The changes will be implemented across all TwinSpires’ platforms, including its iOS mobile app available in the iTunes app store.
The TwinSpires App and Website offer wagering, live video, and handicapping information for all of racing’s biggest bets – as well as racing from around the world up to 21 hours/day, 365 days/year. Customers may open a TwinSpires account and wager through their TwinSpires accounts online at www.twinspires.com, via telephone by dialing 1-877-SPIRES-1 (1-877-774-7371), or via the app.
Thoroughbred Racing Industry Tax and Wagering Laws FAQ
Changes to the United States tax code that go into effect Thursday will directly benefit TwinSpires.com players by letting you keep more of your winnings and eliminating the need for most W2G forms.
However, there still are reporting thresholds to be aware of, and TwinSpires.com reminds all its players to pay tax if you receive income from gambling.
Q. When will TwinSpires generate a W2G and report it to the IRS?
A. The reporting thresholds remain the same: 300-to-1 and a $600 payout. What has changed is how the IRS calculates the 300-to-1. Before, it was based on the unit of wager (e.g. $0.50); now, it’s based on the total amount wagered per transaction.
Q. When is there automatic withholding?
A. Again, the thresholds remain the same at 300-to-1 and $5,000, but it’s the total amount bet per transaction that is used when calculating whether the payout was at least 300-to-1.
Q. Can you give an example?
Let’s say you box five horses in a $1 superfecta—a bet that costs $120. If you win and the bet returns $5,005 you will not receive a W2G or be subject to automatic withholding because 5,005 is not 300x more than 120. Under the old regulations, you’d have received a W2G and had taxes withheld from your account automatically because $5,005 if more than 300x the $1 superfecta that hit.
Q. Am I still responsible for paying income tax on gambling winners?
A. You should consult with a tax preparer with questions, but just because TwinSpires is not reporting winnings to the IRS DOES NOT mean you’re not responsible for paying taxes on certain winnings.
Q. How will these changes help the racing industry?
A. “This is a very big win for horseplayers and for pari-mutuel wagering on horse racing,” TwinSpires President Ted Gay said. “The reduction of wagering dollars withheld from circulation means more money for our players, which means more handle for the industry, our partner tracks, and horsemen.
“These changes will improve the economics of the sport at every level.”
WATCH: The NTRA Press Conference
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(Alex Waldrop photo courtesy of Rick Samuels/NTRA)