As the casino industry expands across the country, and the amount of slot jackpots grows, so does the problem with the slot reporting threshold.
The IRS Threshold Issue Was Raised at the First G2E Insider Live Webinar
The issue of the low IRS threshold was commented on in the first G2E Insider Live webinar, “The Post-election Landscape and Implications for Gaming” on Thursday, held by Chris Cylke, AGA’s senior vice president of government relations.
The event was attended by Aurene Martin, president of Spirit Rock Consulting of Alexandria, Va., Eric Zulkosky, of Fierce Government Relations, an all-Republican lobbying firm, Todd Webster, principal of Cornerstone, a government relations firm based in Washington, D.C, and Phil Cox, founding partner of 50 State, a bipartisan consulting firm based in Washington, D.C.
AGA Proposes the Threshold to Be Raised to $5000
Currently, if a casino player hits a jackpot of $1,200 or more, the slot machine has to be shut down, the casino has to issue an IRS Form W-2G and report the amount to the Internal Revenue Service. While the player and the casino complete the paperwork for the IRS, the slot machine remains shut. This threshold hasn’t been changed since 1977 and according to the American Gaming Association (AGA), it causes financial loss for casinos and also diminishes the positive experience for the players.
At the Live Webinar, AGA suggested the threshold to be raised to $5000. This number is the current equivalent to $1200 when the threshold has taken place back in 1977, according to a statement back in May by Bill Miller, president and CEO of AGA. He also said that due to the inflation the threshold is outdated and has become a burden to both casinos and the IRS itself.
At the webinar Zulkosky, Cylke, and Webster stated that there is a ‘House-approved provision’ that can force the Treasury Department to look at the threshold and report to the congress within a fixed period of time – 90 days. Zulkosky also assumed that it will be a part of “must-pass” legislation. However, it is up to the Treasury Department and the IRS if the threshold is going to be raised or not.
According to Cylke, there is a strong chance for this happening, as their support grows bigger and there is an expansion of legal gaming in the country. He also stated that the prospect of making the threshold higher is looking better.
The Threshold Reform Has Been Anticipated For a Long Time
Back in May, during the Trump administration reforms, AGA raised the issue with the IRS threshold again in the hopes to bring change for the gaming industry. The administration gave an executive order to allow AGA to make another attempt to initiate a reform on the outdated threshold.