US race betting operators expect a surge in betting handle thanks to new rules for how punters’ winnings are taxed.

On Monday, the US Treasury Department and the Internal Revenue Service (IRS) announced new rules for pari-mutuel wagering proceeds. The IRS will now consider a bettor’s entire investment in a single pari-mutuel pool, rather than only the amount wagered on the correct result, when determining the amount to be reported or withheld for tax purposes.

Basically, punters who place multiple wagers on a single pool will now have the full value of their stake applied to their winning wagers for tax purposes. For on-site betting, all wagers placed in a single pool must be made on the same tote ticket. Pool bets placed via advance deposit wagering (ADW) sites will enjoy the same tax benefits without any changes to their current wagering methods.

The reporting thresholds remain the same as before: 300:1 and a $600 payout. But the IRS will now calculate that 300:1 ratio differently. Churchill Downs Inc’s ADW site TwinSpires.com offered the following example of how the system will benefit bettors: