01/29/2015 11:25AM

NTRA meets with Treasury over tax policy

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Officials with the National Thoroughbred Racing Association and several horseplayers met with an official in the Treasury Department this week in Washington to discuss the NTRA’s request for a change in how gambling winnings are taxed, the president of the NTRA said on Thursday.

Alex Waldrop, the president of the NTRA, said the official for Treasury was a “high-ranking individual … who has policy responsibility.” He declined to name the official but said the person was a horseplayer who understood the dynamics of wagering and how betting is affected by tax policies.

“The good news is that we now have an open dialogue with Treasury,” Waldrop said. “But we don’t have anything definitive yet.”

The meeting was put together by U.S. Rep. John Yarmuth, a Democrat who represents Louisville, Ky. An official with Churchill Downs Inc. also was at the meeting. Churchill operates three racetracks and the largest account-wagering company in the U.S.

Last year, the NTRA urged a number of legislators to send a letter to Treasury arguing that the current withholding policy on winnings is unfair. 
Under the policy, any winnings at greater than 300-1 generates a notification to the IRS, and any winnings of $5,000 or more at 300-1 odds or greater triggers automatic withholding, regardless of the amount the player bet.

The NTRA has argued that the notification and withholding should only be triggered if the payoff is 300-1 or greater based on the amount the player wagered in the pool. For example, if a player bets a $24 trifecta box and cashes the ticket, the notification and withholding would only be triggered if the payoff on the $1 winning combination was greater than $7,200.

“We were there simply to give Treasury real-life examples of the administrative burden and real impact of over-reporting and over-withholding on our industry, which is the result of our expanded wagering menu,” Waldrop said. 

The NTRA landed on the strategy of going directly to Treasury after finding little support from Congress for amending the tax laws concerning gambling winnings.