HORSE RACING / BILL CHRISTINE : Betting Pioneer Took the IRS to Court to Gain Respectability

Another April 15 is approaching, and I am thinking of the late Bob Groetzinger again.

If there were a bettors’ hall of fame, Groetzinger would have been a charter member. Not for the Pick Sixes he cashed--and there were more than a few--and not for the parlays he made, but for the nine-year battle he fought with the Internal Revenue Service.

The house took him on, but Groetzinger wasn’t intimidated, and in the end he showed that the house doesn’t always win. His ultimate victory, after a review by the U.S. Supreme Court, was a watershed for professional parimutuel bettors. It legitimized their breed. Guys who play the horses for a living no longer need another life. They can fill out their 1040 forms without concern that the government will flag them simply because of their profession.

Bob Groetzinger--his friends called him Gretz--used to live in Peoria, Ill. In 1978, having lost his job with a trucking company, he decided to try to make a living betting greyhound races.

He was no dilettante. In the 1960s, at a track in St. Petersburg, Fla., Groetzinger had picked the winners of seven consecutive races and collected $22,000.

In ‘78, Groetzinger spent part of the year at the greyhound tracks in Florida, the rest at the track in Denver, the Mile High Kennel Club.

The greyhounds throw a lot of races at their customers. There are day-night doubleheaders in Florida that pack in as many as 28 races. But Groetzinger was the consummate player; he didn’t have to bet every race. He picked his spots and then hammered a play that he really liked. Few players have that kind of discipline.

By the end of the year, Groetzinger had cashed tickets worth $70,000. At least that’s all the IRS wanted to know about. But his expenses, including losing tickets that he was able to document, ran to $72,032.

At the IRS, bells went off. They bounced Groetzinger’s return, suggesting that no one could only be playing greyhounds for a living.

“I’m a dog gambler,” Groetzinger told them. “I spend 60 to 80 hours a week playing the dogs. I play the dogs all over the country. Playing the dogs is my only business.”

The case made its way through the courts, with Groetzinger prevailing but the IRS not giving up. It reached the Supreme Court in 1987. Groetzinger, who had refused to be outlasted, believed he was a 4-to-5 shot, and the vote was 6-3, in his favor.

Justice Harry A. Blackmun, writing about the majority opinion, said:

“If a taxpayer devotes his full-time activity to gambling, and it is his intended livelihood source, it would seem that the basic concepts of fairness (if there be much of that in the income tax law) demand that his activity be regarded as a trade or business just as any other readily accepted activity. . . . Constant and large-scale effort on (Groetzinger’s) part was made. Skill was required and was applied. He did what he did for a livelihood, though with a less than successful result. This was not a hobby or passing fancy.”

For the guys who labor over the figures, for the chartists who stand for hours under the television monitors at the track, recording betting patterns, Blackmun was only saying what they had known all along.

Groetzinger had a right to be smug about the decision.

“I figured I might win,” he said. “We won in the lower courts, so I thought the chances were good that we’d win in the Supreme Court, too. This was the only fair thing that could happen. Anything else and the full-time dog, horse or poker player would be unfairly discriminated against in a free-enterprise society. I have a right to choose what I want to do.”

Groetzinger had more than a one-track mind. He had played basketball--quite well, in fact--at George Washington University. He had once owned and operated a contract bridge club in Denver. According to the American Contract Bridge Assn., he was once the youngest player to achieve life master status.

Gretz didn’t have many years to enjoy his Supreme Court victory. He was 68 when he died.

David Radley, a Peoria attorney and a friend, remembered the funeral.

“There was an open casket,” Radley said. “He had a copy of the Daily Racing Form in one hand, and his favorite putter was in the other. Instead of a handkerchief peeking out of his sport coat pocket, there was the ace of spades. A nice touch. Gretz had left instructions for that.”