Betting on the ponies at Preakness? Don't forget Uncle Sam

[Spiderman]

More publicity about the onerous taxing on horse racing:

http://articles.baltimoresun.com/2011-05-09/business/bs-bz-ambrose-gambling-20110509_1_form-w-2g-federal-taxes-tax-return

Author has different tax amounts than MD residents posted in another thread at PA. Excerpt:

Racetracks will withhold federal and state taxes once you win more than $5,000 and 300 times the wager. The federal withholding rate is 25 percent. Maryland taxes are withheld at a rate of 9.25 percent for residents and 7.5 percent for outside bettors.

Other forms of gambling get a break. Excerpt:

In the case of the ponies, you'll receive a W-2G if you win $600 or more and at least 300 times the amount of the wager. (For bingo and slots, parlors will issue a W-2G if you win at least $1,200. The limit is $1,500 for keno and more than $5,000 for a poker tournament.)

[jelly]

What is the Industry doing about this? :(

[Spiderman]

What is the Industry doing about this? :(

The tax code must be changed for gambling winnings. A race track group and HANA should make this a priority. The reason I posted this article and have expressed my concern on the taxing issue is to bring it to the attention of anyone who can lobby to get changes made.

[thaskalos]

The tax code must be changed for gambling winnings. A race track group and HANA should make this a priority. The reason I posted this article and have expressed my concern on the taxing issue is to bring it to the attention of anyone who can lobby to get changes made.
It is a SHAM that the current tax laws consider our winning ticket as a ONE DOLLAR wager...regardless of how much the actual cost of the ticket was.

These laws are in dire need of reform...and - since the "racing industy" is unwilling to do it - HANA should try their hand at this.

I have been audited 3 times because of horseracing-related matters...and in each case I have pointed out the unfairness of the gambling laws to the IRS agent.

Their response is always the same:

"Sir, these laws have been in affect since the mid-1970's...and they have NOT been revised. Until the laws are changed...this is all we have to work with."

When these tax laws were instituted...a 300-1 payoff was considered a BONANZA...because large-scale exotic betting was unheard of.

Today's large-paying exotic tickets are EXPENSIVE to make.

When a player spends $96 on a pick-4 ticket, and it pays $1,000 for a dollar...his actual return is 9-1...not 1000-1, as the gambling laws would have us believe!

[Robert Goren]

Taxes are a problem for the racing industry, but changing the tax laws will not change the overall health of the sport. As for things that are wrong with the sport, reporting laws are far done the list. There are a lot bigger fish to fry for the handicappers.

[Pell Mell]

It is a SHAM that the current tax laws consider our winning ticket as a ONE DOLLAR wager...regardless of how much the actual cost of the ticket was.

These laws are in dire need of reform...and - since the "racing industy" is unwilling to do it - HANA should try their hand at this.

I have been audited 3 times because of horseracing-related matters...and in each case I have pointed out the unfairness of the gambling laws to the IRS agent.

Their response is always the same:

"Sir, these laws have been in affect since the mid-1970's...and they have NOT been revised. Until the laws are changed...this is all we have to work with."

When these tax laws were instituted...a 300-1 payoff was considered a BONANZA...because large-scale exotic betting was unheard of.

Today's large-paying exotic tickets are EXPENSIVE to make.

When a player spends $96 on a pick-4 ticket, and it pays $1,000 for a dollar...his actual return is 9-1...not 1000-1, as the gambling laws would have us believe!

Next will be that you get a W-2 for hitting a $30. super for a dime! :D

[takeout]

Waaay beyond absurd.

[InTheRiver68]

Author has different tax amounts than MD residents posted in another thread at PA. Excerpt:

Racetracks will withhold federal and state taxes once you win more than $5,000 and 300 times the wager. The federal withholding rate is 25 percent. Maryland taxes are withheld at a rate of 9.25 percent for residents and 7.5 percent for outside bettors.

Yes, and I contacted the author and pointed her to another reference that gave the new (as of 1/11) rates of 8.5% for in-state, and 6.75% for out-of-state. (http://forms.marylandtaxes.com/current_forms/Withholding_Guide.pdf)

The rates she quoted were actually correct from 1/08 to 12/10; my rates of 7.5% and 4.75% have been wrong since 1/08!

- InTheRiver68

[Spiderman]

We can all relate a tale or a few of the inequity of the tax code. Many were able to comprehend that the 10% takeout increase in California is theft and it caused a major decline in track handle.

Is it that winners are complaining and those who do not hit signers are silent? if we continue to just take it and don't voice that the tax code is oppressive, it will not only continue but become more stifling. The racing industry decline will be steeper and go into rapid freefall.

More publicity like the cited article will discourage new players. I would like to hear from HANA representatives on this issue.

[takeout]

At least that’s what I’m “hearing”. I don’t know how Maryland could make it any plainer. They’ve had ridiculously high takeouts across the board for years now. And the state withholding… oh that’s just priceless. :rolleyes: