Silver Charm Wrote:
-------------------------------------------------------
> Its all good man and I enjoy the debate. And I
> want to avoid any Politics.

agreed

>
> Here is a scenario I thought about. Lets say they
> make Sports Wagering Taxable. Twin Spires is
> required to send into the IRS a 1099-Gambler form.
>
>
> I make a $100 Win bet at home on my account before
> I go to the Track. When I get to the Track I make
> another $100 Win Bet. The horse wins. Twin Spires
> reports my winner. But how does the On Track
> winnings get reported?

This isn't a lot different than the rest of life. There are various places where they will give you a 5% discount if you pay in cash. Something tells me that the credit card patrons' business is reported to all relevant tax authorities and the cash paying customers' business somehow doesn't make it into the relevant ledger. Just a guess, but wouldn't be a surprise. You see this in many many places. Cash economy is able to slip out of the electronic system. Same is true with crypto (if anonymity is maintained). I just think like in other places, there will be a sliver of business that escapes from the recordkeeping. Just a fact. Of course, one solution to our predicament is going to cash in person. But, as a practical matter, this has other problems - (a) you lose all your frequent customers benefits (no rebates, no freebies), (b) you add a lot of time and cost to the experience that you dont have in living room downs, (c) just handling cash is a big problem - what happens if you have a bad day and exceed your ATM limits? Things like this will lower your handle on track vs electronic, (d) your in person losses are no longer deductible. If you play mostly in person and rarely on line, but you have a big score online, you can only deduct your online losses, not your on track cash losses - this will worsen your tax position rather than help it. Finally, from the standpoint of the IRS, they dont really care - as long as they have compliance for the most part, the sliver that escapes them is going to be more trouble than it is worth for them. Again, this is like many other areas - they are going to look at the big picture - and here the big picture is that for the most part, this is going to be easy to enforce.

>
> How do the On Track Losses get added in? Trying to
> tax On Track winnings would be as difficult as
> trying to tax Scratch Off winners at the
> Convenience Store of Lottery Tickets.
>
AS mentioned above, you dont get the on track losses, but that is all part of the equation. You cant have it both ways - you can say you want to escape detection for cashing but not escape detection for losing. The IRS looks at this with a wide lens. They understand and know some people will do what it takes to avoid detection, but as long as those numbers are small, it wont be worth the effort/cost to go after.

BTW, if the effect of this move is to force everybody off track and go to scratch off lottery tickets - that is a great move from the government perspective. The government makes way more money of scratch off lottery tickets than it does off live horseracing. From their standpoint, it would be terrific if all horse bettors decided to play state lotteries instead of going to the track.

> Here is the deal. There has been massive growth in
> on line wagering not just on horses but sports.
> Fan Duel, Bet MGM. Hard Rock. Its no longer what
> happens in Vegas stays in Vegas. Including
> Gambling winnings. Churchill Hill had a recent
> case where they had a Judge rule that wagers being
> made in Michigan but were routed thru an Oregon
> ADL they own were wagers made in Oregon. NYRA and
> many others were irate. Its the Wild West. But at
> the end of the day it comes down to DONT BITE THE
> HAND THAT FEEDS YOU. And that would be the
> Gamblers.....

There is no question they are biting the hand that feeds them. They are making the bet that Gamblers dont care and will just plow ahead. This is like going all in every hand in poker. It works fabulously until the one hand where you get knocked out. This is going to work out great for the tax authorities, but if they dont kill the golden goose with this one, how much do you want to bet the next improvement is to cap deductible losses at 80%? At some point, one of these moves will kill the golden goose and our sport will die.