Hitting a slot jackpot is a big shot of adrenaline but shortly thereafter the euphoria diminishes when a slot attendant hands you a stack of IRS forms to fill out. The minimum limit on those IRS jackpots has been the same for decades but a new bill could change all of that.
If you have played slots long enough, eventually you will hit a jackpot. But jackpot is a relative term as there are those that are life-changing while others will merely put a few extra bucks in your pocket. But any jackpot that pays out north of $1200 is subject to IRS documents so that Uncle Sam gets his share of your good fortune.
And it has been this way since 1977 when $1200 went a lot further than it does today. In fact, if we take into account inflation and the value of money from 45 years ago, we know that $1200 in 1977 is worth over $5500 in 2022.
And therefore, it’s no coincidence that a bipartisan bill introduced by U.S. Reps. Dina Titus, a Nevada Democrat, and Guy Reschenthaler, a Pennsylvania Republican, will raise the limit from $1200 to $5000 as the threshold for when tax docs must be filed.
The other advantage it would bring is that those slot machines that have been hit for jackpots less than $5000 would no longer be taken out of service while the winners provide identification and fill out the W-2G tax reporting form allowing the IRS to get their piece of your action.
Although this interaction doesn’t normally last for more than 30 minutes, it is still a half-hour that the slot machine is not available to work for the casino or payout yet again to another lucky patron.
A Report Not Issued
The current bill being bandied about is not the first attempt to have this rule changed. In 2020, Congress instructed the United States Treasury Department to investigate this issue and the department has yet to issue a report. The deadline has already come and gone is now over a year late.
American Gaming Association President and CEO, Bill Miller, said, “Increasing the slot tax threshold to account for inflation is a long-overdue change that will alleviate unnecessary administrative burdens on casino operators, their customers, and an understaffed and overwhelmed IRS.”
It’s not surprising this bill has attracted support on both sides of the aisle as it benefits the casino industry and those who patronize it.
Representative Titus, one of the bill’s chief architects, has gone to bat for her Nevada constituents many times before with the most recent being a little over a year ago when she added a provision to House Bill 447, also known as the National Apprenticeship Act of 2021, that included the hospitality industry getting its fair share of the $3.5 billion in federal funds reserved for apprenticeships across a range of industries.
Culinary Workers Local 226, the largest union representing casino workers in Las Vegas, was a major proponent of the National Apprenticeship Act of 2021 and is also fully behind her most recent bill in support of the casino industry.