Key Takeaways
Congressmembers from Nevada and Illinois have petitioned the US Treasury to up the on slot-machine jackpots, which has been frozen in time at $1,200 since 1977, in defiance of inflation.
Rep. Dina Titus of Nevada and Rep. Darin LaHood want the US Treasury to reconsider the reporting threshold imposed 42 years ago. Since then, prices have risen by more than 400 percent. (Image: Wikipedia)In a letter dated May 13, US Reps. Dina Titus (D-Nevada) and Darin LaHood (R-Illinois) wrote to Assistant Treasury Secretary David Kautter to complain that the current system was outdated and was overtasking the casino industry unnecessarily. A new threshold of $5,000 would alleviate this burden, they wrote.
The industry has long argued that the low reporting threshold is detrimental to the customer experience and disruptive to the casino floor, while weighing casinos down with paperwork. Currently, any win over $1,200 requires the machine to be stopped and temporarily taken out of service while a tax form is filled out.
Economic Realities“As the value of a $1,200 jackpot has decreased due to inflation, the number of jackpots hitting that threshold has increased,” wrote Titus and LaHood. “This causes excessive burden to the gaming industry, a main economic driver in our districts.
“When a player hits the jackpot of a slot machine above the $1,200 threshold, the machine locks up and stops play,” they continued. “Staff must issue a W-2G form to the player and validate its accuracy. Raising the threshold would reduce the paperwork burden on businesses and players while ensuring the tax code reflects current economic realities.”
According to DollarTimes.com’s inflation calculator, $1,200 in 1977 would be worth $5,180 in today’s money.In Nevada, gaming alone contributed $711,328,219 in direct tax revenues to the state, while the casino and hotel industry as a whole accounted for almost 40 percent of all fiscal revenues.
Meanwhile, Illinois’ ten riverboat casinos and 6,359 (as of 2018) venues that are licensed to offer electronic gaming devices generated more than $475.4 million in taxes.
Hurdles and PaperworkIn 2016, the threshold even further, to $600, but a pushback from the American Gaming Association persuaded it to reconsider. The IRS had wanted to use player loyalty cards to track wins electronically to help enforce the proposed rule.
This week, new AGA CEO Bill Miller issued a statement in support of Titus and LaHood s efforts to “update the antiquated threshold for reporting slot machine winnings while relieving associated burdens for casinos, their patrons and the IRS alike.”
He said the current system created “inefficiencies, paperwork and unnecessary hurdles,” noting that casinos were “the only businesses that must take their assets out of production to comply with their tax information reporting obligations.”
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