Betting Syndicate

[Track Phantom]

Does anyone know if a horse racing betting syndicate is totally legal?

I have about 40 people contributing to a bankroll for the Breeders' Cup that we'll be putting in large bets. If we win, I collect the money and pay out everyone their share. I'm just curious if there is anything illegal these days with doing that. Imagine hitting 4,000,000 and having to cut $100,000 checks to 40 people. That could get attention.

Not even sure who to ask.

[Augenj]

Does anyone know if a horse racing betting syndicate is totally legal?

I have about 40 people contributing to a bankroll for the Breeders' Cup that we'll be putting in large bets. If we win, I collect the money and pay out everyone their share. I'm just curious if there is anything illegal these days with doing that. Imagine hitting 4,000,000 and having to cut $100,000 checks to 40 people. That could get attention.

Not even sure who to ask.
Might be some answers in this link. My concern with you collecting the money is the tax impact on you personally.
http://www.ezhorsebetting.com/horse-racing-betting-syndicate/

[Dave Schwartz]

There was a guy in TX that I had knowledge who was arrested while buying a racing form on the way to LAD. (He was still in TX at the time.)

Seems the authorities had been watching him as a "bookmaker." (He was not a bookmaker; simply asked people at work if anyone wanted to make a bet.)

His crime was that he had taken $80 worth of bets from his friends at work to place for them at the track. He had written down the wagers on pieces of paper that said things like "Bob, $5 win-place, R5 #3."

These papers were called his "betting slips."

No joke. He got off with no prison time but a felony conviction and was barred from TX race tracks for life. It cost him his career as well as a lot of money to stay out of prison.

[JustRalph]

Does anyone know if a horse racing betting syndicate is totally legal?

I have about 40 people contributing to a bankroll for the Breeders' Cup that we'll be putting in large bets. If we win, I collect the money and pay out everyone their share. I'm just curious if there is anything illegal these days with doing that. Imagine hitting 4,000,000 and having to cut $100,000 checks to 40 people. That could get attention.

Not even sure who to ask.

Your local DA. Get it in writing

[Light]

Does anyone know if a horse racing betting syndicate is totally legal?

I have about 40 people contributing to a bankroll for the Breeders' Cup that we'll be putting in large bets. If we win, I collect the money and pay out everyone their share. I'm just curious if there is anything illegal these days with doing that. Imagine hitting 4,000,000 and having to cut $100,000 checks to 40 people. That could get attention.

Not even sure who to ask.

As the "administrator" of the syndicate, you will be required to file Form W-2G and complete Form 5754 which will show the Irs that you are not the sole winner of the wager. Otherwise you will be liable for tax on the entire winnings. It's also a bit of work and responsibility that you should be compensated for.

From The IRS:

Horse Racing, Dog Racing, Jai Alai, and Other
Wagering Transactions Not Discussed Later

File Form W-2G for every person to whom you pay $600 or more
in gambling winnings if the winnings are at least 300 times the
amount of the wager.


Withholding

If the winner of reportable gambling winnings doesn't provide
a TIN, you must backup withhold at the rate of 24% on any such
winnings that aren't subject to 24% regular gambling
withholding. That is, backup withholding applies if the winnings
are at least $600 but not more than $5,000 and are at least 300
times the wager

https://www.irs.gov/pub/irs-pdf/iw2g.pdf

Use Form 5754, Statement by Person(s) Receiving Gambling
Winnings, to prepare Form W-2G only when the person
receiving gambling winnings subject to reporting or withholding
isn't the actual winner or is a member of a group of two or more
people sharing the winnings, such as by sharing the proceeds of
the same winning ticket. The payer is required to file Forms
W-2G based on Form 5754

https://www.irs.gov/pub/irs-prior/iw2g--2018.pdf

[Robert Fischer]

and when you collect, you will get a CTR. This could be tricky if you claim 100k in winnings and the IRS has just been alerted that you just won 4M.

When your partners deposit at the bank, they will get CTRs. They will have to remember to set aside tax $

[AndyC]

and when you collect, you will get a CTR. This could be tricky if you claim 100k in winnings and the IRS has just been alerted that you just won 4M.

When your partners deposit at the bank, they will get CTRs. They will have to remember to set aside tax $

Wouldn't getting paid by check eliminate the requirement for a CTR?

[SG4]

and when you collect, you will get a CTR. This could be tricky if you claim 100k in winnings and the IRS has just been alerted that you just won 4M.

When your partners deposit at the bank, they will get CTRs. They will have to remember to set aside tax $


I have a question since I believe you mentioned CTR's in regards to ADW transactions the other day as well - have you ever received one of these? Or is a CTR only kept in bank records & the individual doesn't receive a copy? I ask cause I have yet to see this come into play to my knowledge when using ADWs & transactions in or out of the account.



This is completely hypothetical, but say the leader of the syndicate put in $15,000 of pick 6 bets on their personal ADW & received a total payout of $4,000,000. If they withdrew this money directly from the ADW to their checking account & then wrote out 40 checks of 100k each to all the syndicate members who then went on & deposited this in their bank accounts, I don't see one step in this process that would alert the IRS to this income.



Now obviously skirting your tax bill is not the legal thing to do & I'm NOT suggesting that here, but I'm just saying I don't think the gov't would have knowledge of this until it was self-reported, as is the case for almost all gambling winnings now.

[Dave Schwartz]

I have a question since I believe you mentioned CTR's in regards to ADW transactions the other day as well - have you ever received one of these? Or is a CTR only kept in bank records & the individual doesn't receive a copy? I ask cause I have yet to see this come into play to my knowledge when using ADWs & transactions in or out of the account.



This is completely hypothetical, but say the leader of the syndicate put in $15,000 of pick 6 bets on their personal ADW & received a total payout of $4,000,000. If they withdrew this money directly from the ADW to their checking account & then wrote out 40 checks of 100k each to all the syndicate members who then went on & deposited this in their bank accounts, I don't see one step in this process that would alert the IRS to this income.



Now obviously skirting your tax bill is not the legal thing to do & I'm NOT suggesting that here, but I'm just saying I don't think the gov't would have knowledge of this until it was self-reported, as is the case for almost all gambling winnings now.

When I used to get paid from one of my handicapping partnerships, I received a check. At the end of the year I got a 1099 from the organization.

Trust me... they have to send a 1099 or else they are eating all the taxes and are breaking the law.

[BCOURTNEY]

Does anyone know if a horse racing betting syndicate is totally legal?

I have about 40 people contributing to a bankroll for the Breeders' Cup that we'll be putting in large bets. If we win, I collect the money and pay out everyone their share. I'm just curious if there is anything illegal these days with doing that. Imagine hitting 4,000,000 and having to cut $100,000 checks to 40 people. That could get attention.

Not even sure who to ask.

You might look into the laws in Nevada, I think they legalized Nevada based wagering syndicates a few years ago? Might be of interest if the collective has permanence.

[Robert Fischer]

Wouldn't getting paid by check eliminate the requirement for a CTR?

nope

you = get a CTR from the track for the $4,000,000 no matter how you ask to get paid (can't see anyone 'cashing' to begin with, but whatever payment option you choose...)

partners= get a CTR once they deposit their check in the bank.

you get a CTR for a 10k or more hit and/or deposit, whether you want cash check or whatever...

CTR is not a cash thing.


-----
as far as the tread starter - the rules, or the template of a successfully run syndicate?... I don't know those...
It's been done before... Have to look up the precedents and stand on their shoulders if you're serious

[Robert Fischer]

I have a question since I believe you mentioned CTR's in regards to ADW transactions the other day as well - have you ever received one of these? Or is a CTR only kept in bank records & the individual doesn't receive a copy? I ask cause I have yet to see this come into play to my knowledge when using ADWs & transactions in or out of the account.
No you aren't notified.



This is completely hypothetical, but say the leader of the syndicate put in $15,000 of pick 6 bets on their personal ADW & received a total payout of $4,000,000. If they withdrew this money directly from the ADW to their checking account & then wrote out 40 checks of 100k each to all the syndicate members who then went on & deposited this in their bank accounts, I don't see one step in this process that would alert the IRS to this income.
leader gets = a CTR for withdrawing to his checking account from ADW.

members = get CTRs for depositing their check.


Currency Transaction Report is not limited to cash transactions. Unless your ADW is some kind of unique offshore situation, at least one (your receiving bank), and possibly both the ADW and Bank may have to write CTR

[AndyC]

nope

you = get a CTR from the track for the $4,000,000 no matter how you ask to get paid (can't see anyone 'cashing' to begin with, but whatever payment option you choose...)

partners= get a CTR once they deposit their check in the bank.

you get a CTR for a 10k or more hit and/or deposit, whether you want cash check or whatever...

CTR is not a cash thing.


-----
as far as the tread starter - the rules, or the template of a successfully run syndicate?... I don't know those...
It's been done before... Have to look up the precedents and stand on their shoulders if you're serious

I am just not seeing in any literature where a check is considered currency. Since a check can be traced while cash can't be there doesn't seem to be a purpose to include checks.

[Dave Schwartz]

You might look into the laws in Nevada, I think they legalized Nevada based wagering syndicates a few years ago? Might be of interest if the collective has permanence.

Good idea. They were never actually illegal, but the GCB (not to be confused with the Gambler's Book Club) determined that rules were needed for "Betting Hedge Funds."

I actually intervened for a friend/client who got pretty ripped off by one about a decade ago (before there were rules). I was shocked to find that, since there were no rules, the GCB refused to get involved.

[Robert Fischer]

I am just not seeing in any literature where a check is considered currency. Since a check can be traced while cash can't be there doesn't seem to be a purpose to include checks.

Maybe I'm wrong about that :ThmbUp: Maybe it's just for cash.

getting outside my circle of competence.

Worth looking into this question and others related to depositing big checks in terms of how they could impact tax and audits.

[Light]

There is nothing illegal about a group of people pooling their money together to make a wager. This happens all the time with "Lottery syndicates" if you want to call them that. Many times its a group of people at work who are glorified by the media when they hit and take a group picture together. Nobody questions this as "illegal".

[AndyC]

There is nothing illegal about a group of people pooling their money together to make a wager. This happens all the time with "Lottery syndicates" if you want to call them that. Many times its a group of people at work who are glorified by the media when they hit and take a group picture together. Nobody questions this as "illegal".

There are things that are illegal that just aren't prosecuted. I have no idea if Lottery syndicates or pari-mutuel syndicates are either legal or illegal. I would assume that a person running such a syndicate would not want to run afoul of state laws. Multi-state syndicates would present the most issues. What is legal in state A might be illegal in state B. Collecting money from other state residents might be the biggest stumbling block.

[Light]

There are things that are illegal that just aren't prosecuted.

So if a few friends of mine and I want to play some of these big pick 6 carryovers and we pool our money together, you are saying we are breaking the law? Baloney.

[AndyC]

So if a few friends of mine and I want to play some of these big pick 6 carryovers and we pool our money together, you are saying we are breaking the law? Baloney.

I didn't say that. If your friend is in Utah and sends you money via Paypal to play the P-6 you might have issues. If you and your friends meet outside of the track or OTB and you collect the money and then take the money to the track by yourself to make the bets you may have issues. It all depends on state laws and a willingness to prosecute.

[Light]

I didn't say that. If your friend is in Utah and sends you money via Paypal to play the P-6 you might have issues. If you and your friends meet outside of the track or OTB and you collect the money and then take the money to the track by yourself to make the bets you may have issues. It all depends on state laws and a willingness to prosecute.

That doesn't seem to be an issue with the OP.

Also just because you are a group of people making a combined wager and you call yourselves a syndicate, doesn't make you illegal.

An illegal syndicate is one where the proceeds in and or out of the syndicate are connected to criminal activities such as the Mafia use to run.

A legal syndicate is one where a group of people combine their wagers and there are no illegal ties in or out of the syndicate. It is also condoned and supported by the IRS or they would not have created form 5754 which is just for that purpose.

[AndyC]

That doesn't seem to be an issue with the OP.

Also just because you are a group of people making a combined wager and you call yourselves a syndicate, doesn't make you illegal.

An illegal syndicate is one where the proceeds in and or out of the syndicate are connected to criminal activities such as the Mafia use to run.

A legal syndicate is one where a group of people combine their wagers and there are no illegal ties in or out of the syndicate. It is also condoned and supported by the IRS or they would not have created form 5754 which is just for that purpose.

I did not say that a group of people cannot combine their money to make a wager. It's how and where you combine that matters. Back in the 80s a well-known handicapper named Gordon Jones was arrested for bookmaking because he collected money off-site for group P-6s.

A form 5754 is an administrative form that notifies the payor how the winnings are divided. It is not form that legalizes groups that are acting outside of the state or federal law.

[Light]

I did not say that a group of people cannot combine their money to make a wager. It's how and where you combine that matters. Back in the 80s a well-known handicapper named Gordon Jones was arrested for bookmaking because he collected money off-site for group P-6s.

A form 5754 is an administrative form that notifies the payor how the winnings are divided. It is not form that legalizes groups that are acting outside of the state or federal law.

If you read what I wrote you would understand that I already said a syndicate is illegal when it is tied to criminal activities. Bookmaking is a criminal activity so your point about GP is mute.

Also it is absurd for you to think that I think form 5754, an IRS document, would legalize an illegal activity.:faint:

[AndyC]

If you read what I wrote you would understand that I already said a syndicate is illegal when it is tied to criminal activities. Bookmaking is a criminal activity so your point about GP is mute...

OK. What we don't agree on is what constitutes criminal activity.

[thaskalos]

Let me understand this:

If forty guys bet their money separately, then they are doing nothing wrong. But if they pool their money and wager as a team, then they are now a "betting syndicate"...and there might be "criminal activity" going on?

[Light]

OK. What we don't agree on is what constitutes criminal activity.

It's not what we say, it is what the law says.

[AndyC]

Let me understand this:

If forty guys bet their money separately, then they are doing nothing wrong. But if they pool their money and wager as a team, then they are now a "betting syndicate"...and there might be "criminal activity" going on?

No you don't understand. Where did the 40 guys pool their money? How did they pool their money? Did they all go to the track or OTB where the bet was placed?

If 40 guys did their pooling at the track or OTB they would have no issues. Each state has laws governing gambling within their own states so anything done away from the track or OTB may or may not be a problem.

[thaskalos]

No you don't understand. Where did the 40 guys pool their money? How did they pool their money? Did they all go to the track or OTB where the bet was placed?

If 40 guys did their pooling at the track or OTB they would have no issues. Each state has laws governing gambling within their own states so anything done away from the track or OTB may or may not be a problem.

If I am in a group of 40 guys, and we are pooling our money and betting as a team, and I am assigned the responsibility of carrying the collected money to the track and placing the wagers...can I be brought up on "bookmaking" charges? Is that what the government calls "bookmaking"?

[Light]

No you don't understand. Where did the 40 guys pool their money? How did they pool their money? Did they all go to the track or OTB where the bet was placed?

If 40 guys did their pooling at the track or OTB they would have no issues. Each state has laws governing gambling within their own states so anything done away from the track or OTB may or may not be a problem.

Dude ,the OP never brought up these hypotheticals. You did and you want to beat your chest about it.

[AndyC]

If I am in a group of 40 guys, and we are pooling our money and betting as a team, and I am assigned the responsibility of carrying the collected money to the track and placing the wagers...can I be brought up on "bookmaking" charges? Is that what the government calls "bookmaking"?

It's a state by state issue.

[JustRalph]

It's a state by state issue.

Andy, seems like you’ve got a good handle on it

State lines make difference. Transfer of the money makes a difference.

Btw, the OP lives in Austin. That DA/prosecutor is known for being a little different” ........

[AltonKelsey]

Sounds crazy but maybe this was the Texas law that was enforced





Gambling Promotion
Tex.Pen.C. 47.03 (http://www.statutes.legis.state.tx.us/Docs/PE/htm/PE.47.htm) covers gambling promotion. It is also a technical statute and you should read it for any and all offenses and exception, but mainly that statute makes it an offense to (1) operate or participate in the earnings of a gambling place (defined as “any real estate, building, room, tent, vehicle, boat, or other property whatsoever, one of the uses of which is the making or settling of bets, bookmaking, or the conducting of a lottery or the playing of gambling devices.”);
(2) engage in bookmaking (defined as either receiving and recording or to forwarding more than five bets or offers to bet in a period of 24 hours; receiving and recording or to forward bets or offers to bet totaling more than $1,000 in a period of 24 hours; or a scheme by three or more persons to receive, record, or forward a bet or an offer to bet.)
Gambling promotion is a Class A Misdemeanor punishable by up to a year in jail and a fine not to exceed $4,000.

[AndyC]

Dude ,the OP never brought up these hypotheticals. You did and you want to beat your chest about it.

You are correct, he brought up no specifics or hypotheticals. He brought up a general question which cannot be answered generally because there are so many factors to consider. I am merely trying to point out some things to consider. If that constitutes beating my chest then I am guilty.

And that would be Mr. Dude to you.

[Light]

Mr Dude

The OP lives in Texas and never made any mention of crossing state lines with syndicate money. You did and then defended it staunchly. I'd say that constitutes conjuring up a non existing argument to beat your chest to.

[AndyC]

Mr Dude

The OP lives in Texas and never made any mention of crossing state lines with syndicate money. You did and then defended it staunchly. I'd say that constitutes conjuring up a non existing argument to beat your chest to.

But he didn't say he wasn't crossing state lines either. And he didn't say where he was collecting the money or how he was collecting the money. I brought each of those up for consideration. They all present potential problems.

Time for my nap.

[Light]

You definitely need a nap.

[Track Phantom]

But he didn't say he wasn't crossing state lines either. And he didn't say where he was collecting the money or how he was collecting the money. I brought each of those up for consideration. They all present potential problems.

Time for my nap.

Collecting money from various people in various states and making a large bet in Las Vegas.

[Mr.XXX]

You definitely need a nap.

Last I saw, this isn't trolladvantage.com
I would like to hear his two cents of additional info from his professional perspective.

FYI beating your chest is not that, it's when you post about some contest that you're doing well in.

We all miss out terribly-- so many talented lurkers don't dare post because of stuff like this.

[cato]

click on "User CP"
click on "edit ignore list"
type in the word "Light"
click "okay"
have a beer and a modest celebration...maybe some popcorn :popcorn:

[Light]

Last I saw, this isn't trolladvantage.com

OOOOKAY.

I would like to hear his two cents of additional info from his professional perspective.

What qualifies him as a professional? How do you know I am not a professional?

FYI beating your chest is not that, it's when you post about some contest that you're doing well in.

When was that?

We all miss out terribly-- so many talented lurkers don't dare post because of stuff like this.

Actually I rarely post anymore because of people like you who are so immature that if someone disagrees with them, you have to resort to low ball name calling tactics such as your insinuation here that I am trolling.

That low level of intelligence that you display with that attitude is why you also do not have the intelligence to state your opinion on a subject without malice towards the person you disagree with. Its a reflection on you, not me.

[Mr.XXX]

OOOOKAY.



What qualifies him as a professional? How do you know I am not a professional?



When was that?



Actually I rarely post anymore because of people like you who are so immature that if someone disagrees with them, you have to resort to low ball name calling tactics such as your insinuation here that I am trolling.

That low level of intelligence that you display with that attitude is why you also do not have the intelligence to state your opinion on a subject without malice towards the person you disagree with. Its a reflection on you, not me.

I'll make a deal with you. Pick on me all you want. But don't pick on someone, then when they don't fight back, keep piling it on.

Or just don't drink and post. Bullying is not cool.

[Light]

Or just don't drink and post. Bullying is not cool.

You should take your own advice

[AskinHaskin]

your point about GP is mute.

Also it is absurd for you to think that I think



Truer words...

(now with evidence!)

[Light]

Stop embarrassing yourself by showing what an A-hole you can be.

[Trips]

click on "User CP"
click on "edit ignore list"
type in the word "Light"
click "okay"
have a beer and a modest celebration...maybe some popcorn :popcorn:
Doing this now.
Thank You:ThmbUp:

[PaceAdvantage]

But he didn't say he wasn't crossing state lines either. And he didn't say where he was collecting the money or how he was collecting the money. I brought each of those up for consideration. They all present potential problems.Andy, you are 100% in the right in this thread.

Did they change the law in CA that got Gordon Jones arrested?

If not, that's prime example #1.

It only gets more complicated from there.

But go ahead...don't worry...anything you want to do is legal...:lol:

[Andy Asaro]

Take it from me. We're all getting the banana on a regular basis. #truth

[Trips]

Take it from me. We're all getting the banana on a regular basis. #truth

So you go both ways? :p