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Hit the Jackpot

The time has come to raise the IRS reporting limit on slot wins

Hit the Jackpot

While inflation has nearly quintupled consumer prices in the last 45 years, at least one thing has remained the same: the $1,200 federal slot tax reporting threshold.

The stagnate threshold combined with the growth in casino jackpots means the customer experience is regularly interrupted and casinos are burdened by operating inefficiencies. Not to mention gaming is the only industry where you have to take a revenue-generating asset out of production in order to comply with tax reporting obligations. Increasing the slot tax threshold would also slow the flood of new W-2G tax forms that inundate an already understaffed and overwhelmed Internal Revenue Service.

Adjusting the slot tax threshold to track for inflation should be obvious. It’s a win for our customers and our industry while reducing unnecessary regulatory burdens.

That is why we are glad to partner on new bipartisan legislation, the Shifting Limits On Thresholds (SLOT) Act, introduced by Congressional Gaming Caucus Co-Chairs Reps. Dina Titus (D-NV) and Guy Reschenthaler (R-PA) to correct this long-overdue oversight. If passed, the bill would finally give operators and the IRS relief by changing the threshold to $5,000 and providing a mechanism for future increases based on inflation.

This welcome legislation builds off years of work by the AGA, with multiple administrations, to resolve this issue.

In 2019, the AGA penned a letter to the U.S. Department of the Treasury requesting an update to the threshold. This was followed by 17 bipartisan members of the Congressional Gaming Caucus sending a similar letter to Treasury. These tactics resulted in a major breakthrough in December 2020, when Congress enacted legislation directing Treasury to report to them on the possibility of changing the threshold through regulation.

Unfortunately, Treasury has not yet issued this report despite additional inquiries from the AGA, the National Indian Gaming Association and several members of Congress—including Titus and Reschenthaler.

While we still believe Treasury has the power to raise the threshold through regulation, we are optimistic that this new legislation—whether passed as a stand-alone bill or as part of a broader legislative package—will provide a permanent solution to the problem.

Congress may not see eye-to-eye on many issues in today’s political climate, but updating this antiquated regulation is common sense. And today’s soaring inflation makes the issue all the more urgent. As Titus recently said, “If we wait any longer, because of inflation, we might have to raise the threshold to $6,000.”

Gaming is still working toward a full recovery from the pandemic and the AGA will continue to fight for sensible regulatory changes and a favorable policy environment to help get us there faster.

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