09/29/2017 12:52PM

Sportech targeting Oct. 10 for system compliance with new tax rules

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A number of clients of the bet-processing company Sportech have been told that their systems will be updated to be compliant with tax revisions beneficial to horseplayers on Oct. 10, two weeks after the revisions went into effect, according to officials of the companies on Friday.

The Oct. 10 date for the update has been relayed to the New Jersey Thoroughbred Horsemen’s Association, which runs Thoroughbred meets at Monmouth Park and the Meadowlands and operates a handful of off-track betting parlors in the state, and to Penn National Gaming Inc., which owns racetracks and casinos across the U.S., according to officials of the company.

The updates will allow bets placed at the facilities to be subjected to new tax rules that allow bettors for the first time to use the total amount bet in a pool for the purposes of determining tax liability, a revision that will dramatically affect how many winning wagers generate tax reports or are subject to automatic withholding. The revisions went into effect on Thursday, generating a scramble among bet-takers to get their systems up-to-date.

United Tote, one of three dominant bet-processing companies in the U.S., updated the systems for all of its clients on Wednesday, while the other bet-processing company, AmTote, had updated many of its largest clients by the time the revisions went into effect.

“Frankly, we’re disappointed that they haven’t been ready for any of this,” said Dennis Drazin, an advisor to the NJTHA, on Friday, referring to Sportech. “It should have been up and running on Sept. 28. They’ve known about this for months. It’s disappointing. What else can I say?”

The updates in New Jersey will apply to the state’s racetracks, its OTBs, and the only licensed account-wagering company in New Jersey, 4NJBets. The account-wagering operation is run by TVG, which has updated its account-wagering system nationwide but is currently using a “manual workaround” for 4NJBets allowing the new tax rules to apply to bets placed through the system, Drazin said.

Penn National Gaming’s most prominent racing facilities are Charles Town in West Virginia, Penn National in Pennsylvania, Zia Park in New Mexico, and Sam Houston Race Park in Texas. The company also owns and operates a number of harness tracks.