OTB operates under the parimutuel gaming laws of the United States, which have very specific rules around taxation and what is considered "taxable" winnings. The IRS includes an individual bettor's entire investment in a single pari-mutuel pool (same track, same race, same wager type/pool, and winning + losing wagers) when determining the amount reported or withheld for tax purposes, as opposed to only the amount wagered on the correct result.
The IRS rules are as follows:
When a wager pays more than $600 (but less than $5000) AND at odds of 300 to 1 or greater (based on the total of all wagers placed on a particular pool):
W-2G forms will be generated automatically when a customer meets the IRS reporting criteria.
Copies of the W-2G will be sent to the IRS, the customer's state of residence (if applicable), and to the customer after the end of the current calendar year.
When a wager pays out $5000 or more AND at odds of 300 to 1 or greater (based on the total of all wagers placed on a particular pool):
24% of the total payout is withheld and will be remitted to the IRS in the customer's name.
A W-2G form will be generated automatically when a customer meets the reporting criteria.
Copies of the W-2G will be sent to the IRS, the customer's state of residence (if applicable), and to the customer after the end of the current calendar year.
It does not matter how many separate wagers are placed by the same individual on the same track, race, and pool; all such wagers are aggregated before the triggering reporting/withholding threshold of odds of 300 to 1 or greater is calculated.
For example, the amount wagered by a Pick Six player who hits with one of 140 combinations on a $1-minimum wager is $140, which is the total amount bet into the Pick Six pool, even if there were multiple separate wagers.
Another way to look at it is: In the past, a winning $2 Pick 6 ticket that paid more than $5,000 would have had taxes withheld, even if the total investment was $100. Now, a $100 Pick 6 wager will only have taxes withheld if the winning payout is over $30,000.
Another example of all wagers on a particular wager type would be a lottery wager, where multiple tickets have been placed on the given lottery. The tickets would be "pooled" together, so that if the base amount of the lottery ticket was $0.50 but you had 10 tickets on that given lottery - then the multiple of 300 to 1 would be based on $5.00 and not the $0.50 base wager amount, as they were all wagered on the same "bet".
If you need additional copies of any W-2Gs please reach out to us and we will endeavor to get you additional copies.
Disclaimer: We strongly recommend that you consult a professional when preparing your taxes. You may need to report your winnings even if you did not receive a W-2G and if nothing is withheld. This material has been prepared for informational purposes only, and is not intended to provide, nor should it be relied on for, tax or accounting advice. You should consult your own tax or accounting advisor regarding your tax or accounting needs.