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Income Taxes and Other Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income and Other Taxes | INCOME AND OTHER TAXES Income Taxes Components of the provision for income taxes are as follows:
| Years Ended December 31,
(in millions) | 2016 |  | 2015 |  | 2014
Current provision: |  |  |  |  |
Federal | $ | 22.0 |  |  | $ | 46.1 |  |  | $ | 13.2 |
State and local | 2.6 |  |  | 3.8 |  |  | 2.0 |
Foreign | — |  |  | 0.4 |  |  | 0.1 |
| 24.6 |  |  | 50.3 |  |  | 15.3 |
Deferred: |  |  |  |  |
Federal | 34.4 |  |  | (1.8 | ) |  | 19.7 |
State and local | 1.6 |  |  | — |  |  | — |
Foreign | (0.6 | ) |  | (1.6 | ) |  | (4.9 | )
| 35.4 |  |  | (3.4 | ) |  | 14.8 |
| $ | 60.0 |  |  | $ | 46.9 |  |  | $ | 30.1 |
Income from operations before provision for income taxes were as follows:
| Years Ended December 31,
(in millions) | 2016 |  | 2015 |  | 2014
Domestic | $ | 168.7 |  |  | $ | 114.4 |  |  | $ | 76.0 |
Foreign | (0.6 | ) |  | (2.3 | ) |  | 0.5 |
| $ | 168.1 |  |  | $ | 112.1 |  |  | $ | 76.5 |
Our income tax expense is different from the amount computed by applying the federal statutory income tax rate to income before taxes as follows:
| Years Ended December 31,
(in millions) | 2016 |  | 2015 |  | 2014
Federal statutory tax on earnings before income taxes | $ | 58.8 |  |  | $ | 39.2 |  |  | $ | 26.8 |
State income taxes, net of federal income tax benefit | 3.5 |  |  | 1.8 |  |  | 1.4 |
Non-deductible expense | 3.3 |  |  | 2.6 |  |  | 1.0 |
Non-deductible acquisition-related charges | 1.7 |  |  | 6.6 |  |  | 1.3 |
Manufacturing deduction | — |  |  | (2.0 | ) |  | — |
Valuation allowance | (0.2 | ) |  | — |  |  | — |
Windfall deduction from equity compensation | (4.9 | ) |  | — |  |  | — |
Other | (2.2 | ) |  | (1.3 | ) |  | (0.4 | )
| $ | 60.0 |  |  | $ | 46.9 |  |  | $ | 30.1 |
Components of our deferred tax assets and liabilities are as follows:
| As of December 31,
(in millions) | 2016 |  | 2015
Deferred tax assets: |  |  |
Deferred compensation plans | $ | 13.3 |  |  | $ | 34.1 |
Deferred income | 6.3 |  |  | 14.3 |
Allowance for uncollectible receivables | 1.2 |  |  | 1.3 |
Deferred liabilities | 3.7 |  |  | 1.9 |
Net operating losses and credit carryforward | 9.4 |  |  | 11.7 |
Deferred tax assets | 33.9 |  |  | 63.3 |
Valuation allowance | (0.5 | ) |  | (1.1 | )
Net deferred tax asset | 33.4 |  |  | 62.2 |
Deferred tax liabilities: |  |  |
Intangible assets in excess of tax basis | 135.0 |  |  | 143.0 |
Property and equipment in excess of tax basis | 35.3 |  |  | 31.2 |
Other | 16.2 |  |  | 15.9 |
Deferred tax liabilities | 186.5 |  |  | 190.1 |
Net deferred tax liability | $ | (153.1 | ) |  | $ | (127.9 | )
As of December 31, 2016, we have federal net operating losses of $5.1 million which were acquired in conjunction with the acquisitions of Youbet.com. The utilization of these losses, which expire between 2023 and 2030, is limited on an annual basis pursuant to Internal Revenue Code ("IRC") § 382. We believe that we will be able to fully utilize all of these losses. In addition, we have $1.6 million of state net operating losses, $0.8 million of which was acquired in conjunction with the acquisitions of Youbet.com. These losses, which expire between 2017 and 2034, may be subject to annual limitations similar to IRC § 382. We have recorded a valuation allowance of $0.2 million against the state net operating losses due to the fact that it is unlikely that we will generate income in certain states which is necessary to utilize the assets. The Internal Revenue Service ("IRS") has audited us through 2012. Subsequent years are open to examination. Big Fish Games was audited by the IRS for the tax year ended December 16, 2014 which is the last tax year prior to our acquisition of Big Fish Games. State and local tax years open for examination vary by jurisdiction. As of December 31, 2016, we have approximately $3.1 million of total gross unrecognized tax benefits, excluding interest of less than $0.1 million. Of this amount, $1.0 million was related to tax positions acquired in the Big Fish Games acquisition. If the total gross unrecognized tax benefits were recognized, there would be a $2.6 million effect to the annual effective tax rate. We anticipate a decrease in our unrecognized tax positions of approximately $0.8 million during the next twelve months primarily due to the expiration of statutes of limitation. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions) | 2016 |  | 2015 |  | 2014
Balance as of January 1 | $ | 2.5 |  |  | $ | 2.9 |  |  | $ | 0.6 |
Additions for tax positions related to the current year | 0.7 |  |  | 0.3 |  |  | 0.5 |
Additions for tax positions of prior years | 0.1 |  |  | 0.3 |  |  | 2.1 |
Reductions for tax positions of prior years | (0.2 | ) |  | (1.0 | ) |  | (0.3 | )
Balance as of December 31 | $ | 3.1 |  |  | $ | 2.5 |  |  | $ | 2.9 |
Other Taxes For the year ended December 31, 2016, we accrued a liability and recognized a $1.5 million selling, general and administrative expense in our accompanying Consolidated Statements of Comprehensive Income related to potential liability for the untimely submission of informational tax returns related to the years 2012 to 2015 for certain casino customers. We have not received any notification of a potential penalty nor remitted any payment, but believe an expense is probable. On July 18, 2016, we were notified of an IRS matter under review in which we are potentially liable for non-filing of federal withholding tax information for certain TwinSpires customers, subsequent to the acquisition of YouBet in 2010. The potential civil penalty plus interest approximates $1.6 million. We believe that we have a strong case for the abatement of the potential penalty, and since it is not deemed probable that this amount will be paid, an accrual was not recorded at December 31, 2016.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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