Re(1): Question for Stray Posted on December 30, 2018 at 01:34:44 PM by StraymarJA
Here is what Steve Christ (expert) has to say about the new rule:
"Three days after the new rules took effect, I was fortunate enough to hit an $11,321 (for 50 cents) pick five at Belmont. Previously, the IRS would have said I had bet 50 cents and won $11,320.50 on a 22,641-1 shot, and I would have had over $2,500 withheld. Now, because I had invested $500 into the pool, the payoff was correctly treated as a 22-1 win, far less than the 300-1 threshold for withholding, so I had nothing withheld or reported."
So Steve C had used ADW (likely the DRF account wagering) and bet $500 total into the pool (on multiple tickets) and the ADW company treats ALL of this wagers on that Pick 5 times the 300-1. The Pick 5 would have had to pay $150,000 to even generate a W2G, and of course no taxes if no W2G.
Now, not the case if you bought your ticket at the track from a mutuel teller. There, they don't keep track of who is buying the ticket (like ADW does), thus the rule applies to the individual ticket the win was on. Thus, if his winning ticket was purchased at the track and the ticket cost was say $20, it becomes a W2G ticket when it is over the $6000 threshold (20 x 300-1).
My ticket being an ADW ticket (spent $1008) would only have been a W2G ticket if it paid $302,400.
So, definitely an advantage to playing through ADW these days if chasing big pots.
I believe it's still the case (but not 100% certain) that if it's a W2G and over $5000, all would be subject to the federal witholding tax.
I was playing a Pick 5 at a track earlier this year and was 2/2 on Pick 5 on some tickets. I played some "cover" Pick 3's on endings I didn't have on the Pick 5. Ran out of funds on my preferred ADW account (and too late in evening to add funds through that ADW), needed to get $4 more in Pick 3's I wanted. Got into another ADW account (diff company) to get the remaining $4. Dern, the $4 bet in the other ADW account came in (it was 4 one dollar tickets) and hit the entire Pick 3 pool for $5740. It generated a W2G and there were taxes witheld. Happy but geesh, not even a W2G and no witholdings if had the $4 extra to get it in my preferred account)....
On another note, many years back I had emailed Steve Christ a copy of my Pick x Excel Program. Probably the first excel based Pick x program he ever used. Also emailed it to one of the DRF journalists (he was having a blast with it playing Pick 4's at NYRA). Think his last name was Moran? Replies: