The IRS is suggesting a change in gambling tax laws. A new proposal requires gamblers to report winnings on slot machines, video poker, keno and bingo for jackpots of $600 or more. That’s quite a cut compared to today’s thresholds of $1,200 for slot and video poker players and $1,500 for keno players. The IRS has set a 90-day period for the casino industry to respond to the suggested changes.
If you’ve ever hit a $1,200 jackpot on a slot or video poker machine, you’ve probably had to sit around and wait for a casino employee to pay you and to sign off on your tax forms. Depending on the time of day and casino, this process could take anywhere from five to 30 minutes.
If the IRS threshold is lowered to $600, casinos would need more staff to fill out tax forms to meet the increased number of jackpots that would need to be reported. Additionally, more machines will be offline while that’s taking place. Obviously, casino operators and their lobbying group, the American Gaming Association, aren’t happy about this.
The current $1,200 and $1,500 thresholds were established in 1977 and haven’t been adjusted for inflation. If anything, I would think the jackpot threshold should increase, not decrease.
We should hear more on the matter some time in June. Until then, you can see the full IRS proposal here and the American Gaming Association’s commentary here.