Federal Bill Introduced that Would Eliminate Automatic 25% Withholding

[jrstark]

FEDERAL BILL INTRODUCED THAT WOULD ELIMINATE AUTOMATIC 25% WITHHOLDING ON PARI-MUTUEL WINNINGS OF $5,000 OR MORE

Bill Has Bi-partisan Support from Members of House Ways & Means Committee

A bill was introduced in the U.S. House of Representatives last night that would eliminate the automatic 25 percent federal withholding on pari-mutuel winnings of $5,000 or more for bets that carry odds of 300-1 or higher. The “Pari-Mutuel Conformity and Equality Act” (PACE Act) was introduced by Rep. John Yarmuth (D-KY). Rep. Charles W. Boustany, Jr. (R-LA) is the lead co-sponsor.

Unlike any of its competitors in other gaming industries, the pari-mutuel industry is burdened by an inequitable tax law that requires waging facilities to withhold federal taxes on winnings over $5,000 if the odds are at least 300 times the amount wagered. The PACE Act (H.R. 2140) would amend the Internal Revenue Code of 1986, whose withholding threshold has remained unchanged for 17 years and was last increased in 1992, from $1,000 to $5,000.

Since then, exotic wagering (bets involving high odds and high potential returns) has grown tremendously in the U.S., now accounting for two-thirds of all pari-mutuel wagers placed.

“The negative impact of withholding is multi-faceted,” said Peggy Hendershot, the NTRA’s Senior Vice President of Legislative Affairs. “For the betting public, it has meant a confiscatory and frequently unfair loss of available capital. That loss of reinvestment or ‘churn’ leads to a reduction in overall wagering that in turn means less revenue generated for state governments, racetracks, and purse money for horsemen. The PACE act would also reduce the high burden of administrative compliance for pari-mutuel operators.

“Our industry and our fans applaud Congressmen Yarmuth and Boustany for introducing this important legislation and we look forward to working with our NTRA Horseplayers’ Coalition to add support to this initiative,” Hendershot added.

The NTRA is a broad-based coalition of horse racing interests consisting of leading thoroughbred racetracks, owners, breeders, trainers and affiliated horse racing associations, charged with increasing the popularity of horse racing and improving economic conditions for industry participants. The NTRA has offices in Lexington, Ky., and New York. NTRA press releases appear on the NTRA web site, NTRA.com.

[Edwarren]

“The negative impact of withholding is multi-faceted,” said Peggy Hendershot, the NTRA’s Senior Vice President of Legislative Affairs. “For the betting public, it has meant a confiscatory and frequently unfair loss of available capital. That loss of reinvestment or ‘churn’ leads to a reduction in overall wagering that in turn means less revenue generated for state governments, racetracks, and purse money for horsemen."

 

UltraHigh takeout and high booking percentages have a much greater impact on 'churn' (IN PERENTHESES !) than withholding. IT's well-known that high booking rates insure diminishing returns to the gambler and handle is way down. Horseracing was once called the poor mans wallstreet but, today, most players and the public get shaken upside down and their pockets turned inside out usually before the feature race.  Trifectas, Supers, parlays like pick wagers, etc. aren't 'churn' bets. WPS and Ex are 'churn' bets and they aren't subject to withholding, so this bill won't apply.  Adding insult to injury are the OTB surcharges juiced from the winners mutual which can legally be as high as 5% of the track mutual, like as is legislated in Oregon, for example, which is probably similar law as other states. While elimination of withholding is a step in the right direction, it's clear Ms Heineshot and racing are heading in the wrong direction, once again.
Hard to believe it took 17 years to reform the law.

[Moon]

Why did you post this in the BC section?

[jrstark]

Why did you post this in the BC section?

Because I haven't created a generic national news release section yet.