Call it a sign of the times and a different kind of slot club.
The gaming industry’s allies in Congress are forwarding legislation designed to raise the IRS’s slot-jackpot reporting threshold from $1,200 to $5,000. Given the current state of gambling in America, with legalized sports betting spreading to state after state and fierce competition for megaresort casinos, this sounds like a natural progression in a corporate gaming culture. You know, a real no-brainer.
Such a change might have been considered harebrained just a few years ago or at the very least politically untenable. But times have changed in the 45 years since the $1,200 threshold was established at about the time New Jersey was joining Nevada as the only two states in the nation with legalized casino gaming.
The bipartisan Congressional Gaming Caucus led by Nevada Reps. Dina Titus (CD-1), Mark Amodei (CD-2), and Steven Horsford (CD-4) on March 3 introduced the Shifting Limits on Thresholds (SLOT) Act that would make a change industry analysts have long said would speed play and eliminate paperwork in the modern era of gaming acceptance. Other members of the Congressional slot club include Democrat Anthony Brown of Maryland and Republican Kelly Armstrong of North Dakota.
It’s not as difficult as assembling a piece of furniture from IKEA, but completing the obligatory W-2G tax reporting form following a slot jackpot takes time and delays play. Since the rule was first enforced, jackpots have increased by dollar amount pretty dramatically.
You’ll certainly get no arguments form the American Gaming Association.
“Today’s legislation is an important and commonsense step to modernize gaming regulations while supporting our industry’s full recovery,” American Gaming Association President and CEO Bill Miller said, sending a special shoutout to Titus and Pennsylvania Republican Guy Reschenthaler. Titus’ district encompasses the Las Vegas Strip.
Smart politics aside, Titus makes the case that updating the threshold after more than four decades simply makes good sense and will help keep the machines from being taken out of service while patrons fill out the appropriate tax forms, which she says are “excessive” and have “increased dramatically.”
“This creates an unnecessary burden on the gaming industry, an economic driver for Southern Nevada and other communities nationwide where slot machines exist. While I believe appropriate taxes should be collected on winnings, raising the threshold would reduce paperwork and ensure this is accomplished more efficiently.”
The question of whether to raise the $1,200 reporting threshold is something the gaming experts at the Las Vegas Advisor call a “fairly frequently asked question” by players. On its website, LVA noted that the AGA first approached the casino-friendly Trump administration with the idea in May 2020, arguing that $5,000 was a “reasonable” level. The IRS in 2015 proposed lowering the threshold to $600.
“When these proposed new IRS regulations came out, the gambling world reacted with an uproar,” LVA observed. “It was a rare occasion when the entire gambling universe, from the giant casino corporations and tribal casinos down to penny slot players united to oppose the plan. And there’s been nary a word since then about lowering the threshold.”
It’s not a done deal. The U.S. Department of Treasury has been studying the issue and has yet to present its report to Congress.
In a Sept. 24, 2021, letter to Treasury Secretary Janet Yellen, members of the Congressional slot club essentially requested a speedy go-ahead. They reminded Yellen that the legislation to review the issue was enacted on Dec. 27, 2020. The deadline passed nearly a year ago.
“As we work to complete the FY22 appropriations process, we are still awaiting the report directed in the last omnibus,” they wrote. “We ask that the Department prepare this report as expeditiously as possible and deliver it to Congress to address this longstanding and burdensome issue.”
And, if it’s not too much trouble, preferably before the Congressional primary.
They didn’t write that last part. I was just thinking out loud.
