PITTSBURGH, PA. – The Internal Revenue Service appears likely to back away from its proposal to reduce the slot jackpot reporting threshold to $600, American Gaming Association President and CEO Geoff Freeman said Monday.
“My understanding is that they have taken a step back from their proposal. They’re going to look at alternative ways and ultimately work with us to solve the problem that they think exists,” Freeman said at a Gaming Votes presentation at Rivers Casino on Pittsburgh’s North Shore.
The IRS said finalizing the regulations is listed as one of its “priority guidance projects” but it cannot comment on the content.
Under IRS regulations in effect since 1977, casinos must issue a W2-G form to document any slot jackpot of $1,200 or more. During the 10 to 30 minutes required for the paperwork, the machine is locked and cannot be played.
The proposal detailed in March 2015 would reduce the threshold to $600. A related plan, called a “revenue procedure” and detailed in IRS Notice 2015-21 , would allow a gambler who keeps good records to report a session’s net result rather than the W2-G total.
The plan to lower the reporting threshold generated 14,120 written comments from the public.
Casino representatives throughout the country castigated the idea to reduce the reporting threshold, saying it would reduce slot revenue and increase labor costs unnecessarily as machines locked up more often. Players criticized the plan as “crazy,” “unbelievable” and “ludicrous.” Many argued that the limit should be raised to reflect inflation.
Freeman said the proposal united the industry, as representatives of tribal and commercial gaming spoke “with one voice” in opposing it.
He cited the IRS proposal as an example of the risk any industry can face from misunderstanding by the public or government.
“If they have bad perceptions, bad policy will follow,” Freeman said. He cited the IRS plan, anti-casino campaigns and a proposal by Pennsylvania Gov. Tom Wolf to tax slot free play as examples.
Freeman also predicted that sports betting outside Nevada will be legalized within five years.
The Gaming Votes presentation, designed to highlight the economic impact of Rivers and others Pennsylvania casinos, came three weeks before the state’s April 26 primary election, which could play a key role in the selection of the presidential candidate for each major political party.
Rivers General Manager Craig Clark said casinos are a reflection of their communities.
“We’re a celebration center,” he said, and political candidates should view casino customers and employees as a microcosm of the people represent.
Freeman touted the $6 billion in economic activity that Pennsylvania’s 12 casinos generate and encouraged political leaders to understand the role casino gaming plays locally and nationally. The AGA wants policy makers to understand gaming and to encourage those who work with casinos to become “champions of the industry.”
Valerie Nije of Bidwell Training Center in Pittsburgh, and Carol Philp, whose company makes promotional products, lauded Rivers for its job creation and involvement with the community.
