These guys play enough and win enough that they certainly have good tax advisers, but the IRS does not like any kind of corporate or partnership entity when it comes to gambling. If they are running anything other than the normal deductions for horse racing they are looking for trouble. That being said, if they are running it like a business, their travel and costs for tournament entry fees and racing forms etc. are certainly deductible.

I'm not sure that they have investors. That I would like to know.

I had the same question regarding the failure to make the minimum wagers. Since you don't have to bet every race, they can't just deduct that amount if you fail to bet a race. So what they do is penalize you at the end of the day for each race you didn't bet. But what that allows you to do, is bet it all on 1 race. If you win, the penalty will be deducted end of day. If you lose, didn't matter. But if you have a $3,000 bankroll and have to bet 5 races at at least $600, you can instead bet the whole 3000 late on a race because your bankroll isn't reduced by the penalty until later.

Here are the rules:

"By the end of Friday, November 3, 2017, a minimum of $600 must be bet per race on a minimum of 5 different races held on Friday, November 3rd. Should a player fail to bet the required minimum number of races (5) at the minimum wager amount required ($600) on Friday's card, 1,000 points will be deducted from the player's total score per missed race.
A minimum of $900 must be bet per race on a minimum of 5 different races held on Saturday, November 4th. Should a player fail to bet the required minimum number of races (5) or minimum per race bet total ($900) on Saturday's card, 2,000 points will be deducted from the player’s total score per missed race.
No simulcast races from other venues may be wagered upon within the Tournament, other than those races noted above. There are no caps on payouts. The player with the highest score, (which is calculated by taking player’s total bankroll less any applied penalties) after the Classic on Saturday, November 4th is the Grand Prize winner. If there is a tie between players, the tiebreaker will be the player who won the most money on the final race of the Tournament, which is Classic on Saturday. If there is still a tie, the winner will be determined by the player who wins the most money in the second to last race of the Tournament. And so on. See #9 below."

A couple of years ago, a guy did that at the Keeneland tournament and won. I think they may have changed the rules now but I'm not sure. It should be disqualification rather than a penalty deduction in my opinion. Otherwise, just don't have any minimum wagers and everyone can wait for the last race. Would make a pretty crappy tournament though.