A Message from AGEM

As we enter 2026, the Association of Gaming Equipment Manufacturers, on behalf of its membership across the gaming supplier sector, seeks to raise awareness of the opportunities associated with the changes to tax reporting thresholds and requirements within the One Big Beautiful Bill Act (OBBBA), which was enacted last summer by Congress and signed into law by President Trump.

By doing so, our regulated gaming supplier community wishes to make our industry friends, regulators and partners aware of a few key issues surrounding those changes at the federal level, in hopes of minimizing disruption or confusion associated with these new limits for products in gaming establishments across the United States.

First and foremost, we agree with and appreciate the efforts of our friends at the American Gaming Association and ongoing attempts to provide gaming industry perspective on the implementation process for any rules, guidance, procedures, policies and/or forms necessary to effectuate the increased statutory floor for federal tax withholding and reporting from the previous $1,200 up to $2,000, and further clarification on such increases to $2,000 applying to both W-2G and 1099-Misc limits.

We wholeheartedly support the information and analysis supplied by the AGA in its July 2025 letter to Treasury Department and Internal Revenue Service leadership on this critical issue, and we welcomed the recent issuance of the 2026 draft tax withholding form on December 16, 2025.

We similarly understand there may be additional steps to further implement OBBBA, with many of those taking place after January 1, 2026, and recognize that continued regulatory efforts and/or potential legislation at the federal level to increase the threshold still higher may be ongoing, along with the potential mechanisms within OBBBA and application regulations for adjustments further upward in future years.

These are positive developments, as bringing those amounts to 2025 inflation-adjusted amounts would benefit all industry participants. In doing so, though, that will result in a threshold that is likely to continue changing over time, meaning any efforts to conform in 2025-26 may be repeated in future years.

Beyond the forthcoming guidance and rulemaking already outlined by the AGA, AGEM wishes to remind our industry colleagues that despite the changes to federal law, several jurisdictions still retain the $1,200 amount for withholding and reporting, whether by statute or regulation. Similarly, many states and local jurisdictions maintain similar withholding requirements aligned with the lower $1,200 amount within their jurisdictions. Whether for child support obligations or similar public policy concerns, they have been revised or changed and remain in place, meaning licensed suppliers are obligated to comply with those reporting thresholds until amended, regardless of changes made in OBBBA.

Our members in the supplier community will each develop and implement the necessary updates to their software and hardware, but please remember that each supplier will have a different solution depending on its technology and products in hundreds of markets and jurisdictions across the United States.

Because those suppliers must pursue and fulfill extensive testing, certification and approval requirements for countless products in each jurisdiction in which they hold a license, we recommend that all operators and regulators directly communicate with each of your supplier vendors and licensees with your instructions, needs and expectations at your earliest convenience.

These communications are critical so that all your desired updates can be completed and implemented, or also important if you wish to maintain the status quo until there is more clarity on legislative and regulatory requirements in particular jurisdictions.

Similarly, that communication is critical as hundreds of thousands of products across hundreds of jurisdictions across the United States are updated, revised, modified or serviced to meet these new requirements in the months and years ahead. That coordination requires consensus, communication and input from regulators, operators and suppliers alike because of the frameworks in place before products can be delivered, serviced, shipped, received or modified.

Our suppliers do not wish to impact or disrupt gaming operations at customer locations or ignore technical requirements from regulators across the United States. But given the scale, scope, breadth and impact of these forthcoming changes across the country, it is certainly foreseeable that inadvertent mistakes or unintentional errors might occur during this multi-month process.

Rather than creating an environment where each potential miscommunication or error could be viewed as an opportunity to issue fines, notices or regulatory actions, we would hope that our industry could work together in 2026 on this issue in a collegial and cooperative way since everyone is managing changes and developments outside their direct control.

Our industry is better together, and this is a great opportunity for the regulated gaming community of regulators, operators and suppliers to collaborate and take advantage of changes made for the betterment of regulated gaming.

Thank you again for all you do in our chosen industry. Our supplier sector looks forward to providing the products, solutions and services in accordance with your direction and needs. Our trade association wishes to remain a resource to provide a supplier perspective and welcomes the opportunity to do so, as our goal is to strengthen this country’s gaming industry for all involved.