Gaming industry leaders are once again seeking to change the reporting threshold for slot machine jackpots and bingo winnings, saying the $1,200 figure is antiquated and needs to be increased.
They believe the Trump Administration’s effort to identify regulatory reform opportunities could be the vehicle that allows the industry to finally reach its goal.
The American Gaming Association said Wednesday that increasing the jackpot reporting figure, which has been in place since 1977, would help modernize the casino industry.
AGA CEO Bill Miller said the change would fall under the Administration’s goal, stated in an executive order, to swiftly identify regulatory reform opportunities that would help promote job creation and economic growth in wake of the coronavirus pandemic.
Miller cited COVID-19’s impact on the casino industry, which since the middle of March has seen nearly 1,000 commercial and tribal casinos in 43 states closed in an effort to slow the spread of the pandemic. Since last week, casinos in more than a dozen states have slowly begun to reopen.
Gaming leaders and supporters in Washington D.C. have said the $1,200 jackpot has been devalued due to inflation, and that the reporting requirement for jackpots at or above that amount places an excessive burden on the industry.
More than a year ago, Miller said raising the jackpot threshold was a top priority for the AGA. The organization has encouraged the Department of Treasury to update the slot jackpot reporting threshold to “a realistic level, in-line with inflation.”
According to federal regulation, when a casino patron wins a slot machine jackpot of $1,200 or more, the machine is temporarily taken out of service and the customer is required to complete a W-2G tax reporting form.
“The current threshold is outdated and imposes significant compliance burdens on both the Internal Revenue Service and the gaming industry,” Miller said.
Slot jackpots have steadily increased with inflation over the past several decades.
“(An) increased threshold would not only enable the IRS to focus its limited enforcement resources on those taxpayers who are most likely to have net slot winnings at the end of the taxable year, but would also significantly reduce the close interactions required to issue tax forms between gaming employees and patrons,” Miller said.
He said the policy change has been supported by bipartisan members of Congress and was “already long overdue prior to the pandemic, and now has additional importance as the gaming industry emerges from this crisis.”
Last year, both Rep. Dina Titus, D-Nevada, and Rep. Darin LaHood, R-Illinois, asked the Treasury Department to increase the reporting threshold.
The request comes almost four years after the gaming industry and its congressional representatives beat back an effort by the IRS to lower the reporting threshold to $600. The IRS was also considering requiring casinos to mandate electronic player tracking for tax reporting purposes.
A grassroots effort led by the AGA helped to kill the proposals.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.