SLOT bill aims to increase tax report limit of slot machine jackpot-winning
June 13, 2022
A new federal bill proposes to raise the limit of tax reports requirement on slot machine jackpot winning. The Shifting Limits on Thresholds or SLOT bill was brought forward to the House of Representatives by Dina Titus, a Democrat from Nevada in March this year. The bill was not only sponsored by her, but also by Representatives Mark Amodei, Anthony Brown, Steven Horsford, and Guy Reschenthaler.
The SLOT act aims to change the current law on slot jackpots and make it similar to the poker winnings law. Poker is a card gambling game also offered in casinos which does not require a report of winnings if not at least $5,000. The SLOT Act aims to change the limit to $5,000 while taking inflation into account in perpetuity. To limit misunderstanding and complex situations, the limit is rounded to the nearest hundred dollars.
“Due to inflation, the number of jackpots hitting that threshold, triggering a shut down of the machine and necessitating excessive paperwork requirements for the patron, has increased dramatically,” said Titus in a press release.
“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.”
Players have 1 in 5,000 to 1 in 34 million odds of winning a slot machine jackpot if they use the maximum coin. A woman from New Jersey won $1.6 million as she hit continuous jackpots on the Wheel of Fortune slot at Resorts Casino Hotel in late February.
The threshold has not changed since 1977
The law requiring slot machine jackpot winners to report their winning to the federal agency for tax purposes began in 1977. The IRS set the bottom limit of reporting at $1,200. The number has not changed to this day.
The amount of $1,200 has a bigger purchasing power in the year the law was first enacted. $1,200 can buy a good car in the 1970s while it is only good for around 11 tanks of gas for a pickup truck in 2022.
Both players and casinos dislike the tax report limitation. It halts the process of live gambling of the winners and takes them out of the winning fantasy as they need to file IRS tax form paperwork. While casinos including Caesars Entertainment, MGM Resorts International, and Wynn Resorts dislike the hassle that came with it.
The SLOT bill was first introduced in Congress back on March 3 as it was passed to the House Committee on Ways and Means. It garnered a lot of support not only from players and casinos but also bipartisan support. Even so, no further progress was seen with the bill, just like any other bill.
“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,” President of American Gaming Association Bill Miller told Las Vegas Review-Journal.
“The legislation provides Congress a direct path to modernize the slot reporting threshold. We look forward to continuing to work with these bipartisan leaders on Capitol Hill to address outdated regulations that impact our industry.”