Thanks to lobbying from the National Thoroughbred and Racing Association (NTRA), Breeders’ Cup tax reporting has changed for the better. How this impacts the sport moving forward remains to be seen in concrete fashion, but there are reasons to be immensely positive about the process for handicappers and players across the country. The 2017 Breeders’ Cup was the first major race to be held under the new provisions provided by the IRS.
The most important factor is the automatic submission of W-2G filings, which not only cause a major backload at the IRS but are also a hassle for horse players. In 2016, there were 1,333 automatic W-2G filings after the Breeders’ Cup. Thanks to the new regulations, this number has dropped to just 35 for 2017, representing a 97% decrease.
“The drastic reduction in W-2Gs at one of the world’s biggest sporting events illustrates what a big win our effort resulted in for horseplayers and the sport,” said NTRA president and CEO Alex Waldrop. “While it is too early to measure the long-term impacts of this change, we are confident that all segments of the industry will benefit from the proceeds being kept in circulation.”
The 2017 Breeders’ Cup was one of the highest paying of all time, and generated an incredible amount of action which should have triggered an uptick in tax reporting. Breeders’ Cup wagering at Del Mar was $25,181,317 in 201y7 compared to $20,742,847 in 2016, which represents a 21.4% increase. This was also the highest all-sources pool since 2010, with $1,66,077,486 in action.
Withholding changes also impacted the tax reporting to a large degree. The withholdings from the 2017 Breeders’ Cup added up to $138,753, which is 55% less than 2016.
The absolute scale of these changes will be seen over the course of the following season, but so far the returns are handsome for some of the major players who have been met with challenges in tax reporting winnings from horse racing in recent years.