It’s time for a change.
Earlier this week, the Trump administration issued an executive order to identify regulatory reform opportunities to promote job creation and economic growth in the wake of the coronavirus pandemic.
The gaming industry, which had to close all 989 of its US casinos, is a welcome candidate for reform.
Slot reporting thresholds are a sensible starting place for reform
In particular, the current slot machine reporting threshold is ripe for change. Currently, any casino patron who wins a slot machine jackpot of $1,200 or more is required to complete a W-2G tax reporting form. During this time, guests cannot play the machine.
Bill Miller, the president and CEO of the American Gaming Association, thinks it’s time to update the policy.
“As the gaming industry safely reopens and seeks to return to financial health, one critical area of regulatory reform the administration should consider is modernizing the $1,200 slot jackpot reporting threshold, which has been in place since 1977. The current threshold is outdated and imposes significant compliance burdens on both the Internal Revenue Service (IRS) and the gaming industry.
Slot jackpots have increased, but reporting thresholds have not
As Miller noted, the slot jackpot reporting threshold has remained unchanged since it was instituted in 1977 — 43 years ago. A $1,200 jackpot in 1977 would be equivalent to more than $5,000 today if adjusted for inflation.
As slot machine jackpots have increased, so have payouts that require reporting. This creates delays and increased person-to-person contact on the casino floor. It also makes for a flood of extra tax documents headed to the IRS every year.
“Last year, the AGA again encouraged the Department of Treasury to update the slot jackpot reporting threshold to a realistic level, in-line with inflation, such as $5,000,” Miller said.
“The 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 close interactions required between gaming employees and patrons.”
Changes to the reporting thresholds receive bipartisan support
Sometimes things just make sense.
Politicians from both parties have supported changing the reporting thresholds of slot machine payouts. It would create fewer delays on the casino floor, less person-to-person contact, and reduced paperwork for the IRS.
It’s a slam dunk if common sense counts.
“This policy change, supported by bipartisan members of Congress, was already long overdue prior to the pandemic, and now has additional importance as the gaming industry emerges from this crisis.”
After a rough spring, our nation and its businesses are ready to reopen. Many of them need some help.
And for US casinos, the slot machine reporting threshold may be the perfect place to start.
It’s time for a change.