The IRS has changed rules for when gamblers are required to declare their winnings and how much in taxes must be withheld immediately after a bet pays off.
In the past any pay-off of $300 or more, 25 percent was subtracted and held for the IRS. The calculation included the entire amount bet at one place, rather than how much the gambler actually won.
One frequent racetrack wagerer told the Los Angeles Times “I think it’s a real big deal. By eliminating the withholding, you have more money in circulation. It helps the churn. It helps the tracks, it helps the horsemen. The owners will be running for bigger purses.”
Alex Waldrop, CEO of the National Thoroughbred Racing Association, told the Times, “We think it will make a difference, but we haven’t quantified it,” adding, “It should translate into significantly reduced withholding. We know bettors will have more money in their pockets. We don’t know how much more they will wager, but we know it will be substantial.”
The industry has been pressuring Congress and the IRS for more than a decade to make this change, without success. Finally, they sought an amendment to the tax code that redefined the amount of the wager from one ticket to the amount put into the wagering pool.
The change might actually bring in more revenue to the IRS because betters will be more likely to report their bets, rather than just their winnings. This is also a reason for keeping losing receipts to use as proof of gambling losses.
