NTRA President and CEO Alex Waldrop led the fight for new tax regulations for horseplayers. (Photo credit: NTRA).
For its dedicated and persistent efforts to benefit horseplayers, which resulted in landmark regulatory changes modernizing federal rules allowing bettors to keep more of their winnings, the National Thoroughbred Racing Association (NTRA) will receive a Special Eclipse Award at the 47th annual Eclipse Awards on Thursday, January 25, in the Sports of Kings Theatre at Gulfstream Park in Hallandale Beach, Fla. The Eclipse Awards will air live on TVG at 8 p.m. ET/5 p.m. PT.
The Special Award honors extraordinary service, individual achievements in, or contributions to the sport of Thoroughbred racing.
For the past decade, the NTRA led a determined fight on behalf of the horse racing industry to address outdated federal income tax rules that depressed pari-mutuel handle, reduced purses for horsemen, and saddled horseplayers and tracks with onerous paperwork requirements. On September 28, 2017, these efforts culminated in the issuance by the U.S. Treasury Department of modernized regulations regarding the withholding and reporting of pari-mutuel winnings. As a consequence, horseplayers will retain more of their winning wagers while both horseplayers and tracks will be relieved of burdensome compliance procedures.
“Horseplayers had been asking for these changes for literally decades, and had pretty much given up hope they would ever happen,” said Steven Crist, the former Daily Racing Form executive and longtime proponent of the reforms and a member of the Eclipse Awards Steering Committee. “The NTRA finally got it done, and as a result the industry has already seen a massive reduction in withholding and paperwork, leading to increased handle and happier customers.”
Speaking on behalf of the organization, NTRA President and CEO Alex Waldrop credited others for the successful result, stating: “The NTRA accepts this award on behalf of the many industry organizations and thousands of horseplayers who supported the effort by funding the NTRA’s legislative action campaign, supporting our Horse PAC with individual campaign contributions, joining the National Horseplayers Championship Tour, and actively engaging with the Treasury Department and the IRS during two critical regulatory comment periods by submitting over 15,000 supportive comments. We thank the Eclipse Awards Steering Committee for recognizing this achievement.”
The Special Eclipse Awards Steering Committee is comprised of representatives from Daily Racing Form, the National Turf Writers And Broadcasters, the Breeders’ Cup and the NTRA. The NTRA recused itself from any discussions relating to the Special Eclipse Award once its name was put forward for consideration.
Waldrop also credited key allies of Thoroughbred racing on Capitol Hill, including Rep. John Yarmuth of Kentucky, Rep. Pat Meehan of Pennsylvania, Rep. Andy Barr of Kentucky, and Senate Majority Leader Mitch McConnell.
Waldrop also credited the NTRA lobbying firm The Alpine Group, led by principal Greg Means, for its extraordinary work in Washington on behalf of this initiative and the Thoroughbred industry in general.
The NTRA and Alpine, working with key Congressional allies, tax specialists from its longtime Washington, D.C.-based law firm, Davis & Harman, and others, had pushed for the modernization of pari-mutuel withholding and reporting rules since the early 2000s. As more and more pari-mutuel wagering was directed toward exotic wagering pools, it became clear that the tax rules were becoming an increasing and unfair burden on horseplayers and tracks as those outdated rules significantly increased the incidence of winning tickets subject to withholding and reporting. Under the new regulations, 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, not simply the amount wagered on the winning combination.
The effects of the new regulations had an immediate and dramatic impact at last November’s Breeders’ Cup World Championships at Del Mar. Despite some of the longest-priced winners in Breeders’ Cup history, only 35 winning tickets at the Del Mar Thoroughbred Club triggered IRS reporting or withholding via automatic W-2G filings across the two-day event. That represents a 97 percent reduction from the previous year, when 1,333 W-2G filings occurred on-track at the host site.
“The drastic reduction in W-2Gs at one of the world’s biggest sporting events illustrates what a big win this is for our sport,” said the NTRA’s Waldrop. “While it is too early to measure the long-term impacts of these changes, we are confident that these new regulations will have a lasting positive impact on horseplayer winnings, resulting in increased handle for racetracks and additional purse money for owners and horsemen.”
“I want to thank the NTRA for championing this effort on behalf of horseplayers and the entire industry,” said Chris Larmey, Chairman of the National Horseplayers Championship (NHC) Players Committee, who visited Capitol Hill in 2015 with fellow horseplayer Judy Wagner to help educate Treasury officials regarding the unfairness of outdated tax policies related to withholding and reporting. “Thanks to the NTRA and other supportive organizations, horseplayers will now keep more of their winnings on race day and have to fill out far fewer tax forms. This is truly something the entire industry can celebrate and profit from. Hopefully, we can build on this success and momentum and apply it toward other important challenges facing the racing industry.”
