How exactly does ten-percenting work?

[charleslanger]

Speaking of withholding.........

I would be most appreciative of a primer.

TIA

 

[Labeeb]

They will cash IRS signers for 10% of the net proceeds in order to save the original ticket purchaser the paper trail of W2-G forms back to their SS#. They either :

1. Have a fake SS card
2. Don't pay their own taxes
3. Play at a facility where actual proof of a SS card is required and simply recites a known bogus SS#. Believe it or not this happens, even at an OTW facility where I worked, at least until I learned about it and changed that practice immediately.

10%ing recently got some NYRA mutuel clerks and officials in some BIG TIME hot water. That along with money laundering schemes, etc.

 

[charleslanger]

Thanks for the answer, Labeeb-- what i was wanting to know: supposing i wanted to do it without scamming anyone:

someone is holding a potential $10K payout, meaning 2,800 gets deducted, leaving $7,200: does this mean i need to give the person another 1,800 from my pocket, to total $9K? Then at tax time i supposedly will get the rest coming back to me(assuming claiming enough losses, the appropriate tax bracket, yada, yada) ?

thank you kindly.

 

[charleslanger]

After re-reading your answer, i would guess-- and actually suspected so before-- that i would cash the ticket in exchange for 10% of the remaining $7200. In this case it could be fairly lucrative....

 

[Labeeb]

In all honesty I never saw a mandatory withhold 10%ed. The tickets would all fall under the mandatory withhold limits. If 10% a ticket like that, that's how it would have to work in order for all sides to be happy, however seeing those who would provide this "service", most wouldn't have $18 let along $1,800 to shell out for this. Maybe up in NY they operate like this.

Word of warning, if audited by the IRS, the requirements for claiming losses is MUCH more than just producing losing tickets. The IRS is very stingy about what can be accepted as proof of losses, things such as account wagering reports, VERY extensive logs, etc.

I'd advise against doing it even though not all W2-G forms get cross referenced with 1099s.

 

[charleslanger]

Gotcha. Thanks, I really appreciate your answers.

 

[HiloBoy]

On the So Cal racing circut they have quite a few ten percenters that do that for a living. The other thing they do is buy and sell live pick six tickets during the day. Kind of a middleman broker of exotics.

 

[Labeeb]

You tend to see the purchasing of live tickets at the major circuits such as NYRA and SoCal. It used to be really popular at Penn National back in the day of the Twin Trifecta. There would be a huge on track market for live tickets going into the back end. But those were the pre full card simulcasting days. Now the plant serves merely as a place to take signals and house slots down the road (albiet it will be in a new, seperate building)

 

[HiloBoy]

Labeeb,

The funny thing was back in the 90's a few of these guys who never worked a day in their lives were able to make 50,000 plus a year working the pick six angle. Of course they blew it as fast as they got it But it did keep them in action. This was on the Santa Anita, Hollywood, Del Mar circut.

 

[charleslanger]

Fascinating..... i did a little bit of that with sports parlays in Vegas...

 

[HiloBoy]

Another thing that went on was when they changed from the old ticket seller windows to the computer machines lots of people would leave a cash balance on the computer. Guys would be waiting by the machine for you to leave a cash balance so they could cash it out as soon as you walked away.

 

[charleslanger]

That still goes on a tiny bit w/ the SAM's out here....

Can you still bet a race at the SAM's a little bit after it goes off out there?

 

[Labeeb]

If the mutuel manager on duty is sharp (some are and some aren't), you can easily "gumshoe" the ticket assuming your windows have cameras on them. Once it's ID'd, even if you don't catch the guy that day if he leaves the track immediately after cashing, he'll be back. Then you present the tran report along with the time stamped tape, threaten to prosecute and he'll cough up the cash. I was so confident in this method that I would front the cash to the rightful owner of the ticket knowing I would get the money back. I didn't get burned once.

Being able to bet a race after the bell isn't exclusive to SAMs/STAN/TIMs. It's just a matter of the host track sending the close betting signal. Luckily most tracks are/were good in terms of reconciling losses with satellite locations.