Question of the Day 2017-04-06

In past QODs you’ve talked about W-2Gs for slots and VP and their effect on the pace of play. But how are W-2Gs handled for table games where many players are in the game?

W-2Gs are issued only for machine play, bingo, and keno. The reporting thresholds are $1,200 for slots and bingo and $1,500 for keno.

These thresholds were implemented in 1977. In 2015, the IRS launched a small trial balloon, suggesting that because so much had changed over the past 38 years, especially relating to potential money laundering and “terrorist financing,” it was considering lowering the thresholds to $600.

Actually, the $600 figure didn’t come out of thin air. The IRS proposed it in 1977, but it precipitated so much opposition that they doubled it. Even more resistance emerged in 2015, including an American Gaming Association petition signed by people in all 50 states, plus 14,000 letters and emails against lowering the thresholds. So the balloon kind of floated away.

W-2Gs aren’t required for winnings from table games, no matter how high the win. There’s one exception: A W-2G is issued on winnings of 300-for-1 or more that exceed $600. This primarily applies to progressive jackpots, lotteries, sweepstakes, and other big winnings from small bets. Also, cash transactions of $10,000 or more trigger a Currency Transaction Report (CTR).

Of course, you’re subject to a tax liability for any and all gambling winnings. But without W-2Gs, table-game player are on the honor system.

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Apr-06-2017

AL

On the QoD about W-2G's and table games, on that item about 300:1 and $600 for certain other kinds of winnings, it also includes horse racing.  But double-check as to whether it's 300 TO 1, vs. 300 FOR 1 (those are not the same thing), and double-check whether the amount factor is only winnings OVER $600, vs. $600 exactly or more.  I believe the actual details say 300 TO 1, and $600 as well as over-$600, but we may as well know for sure.  One recent IRS change favoring the player is that when a player makes a single multi-combination bet (such as multiple horses in each leg of a Pick 3 or Pick 4 or Pick 5 or Pick 6) and gets a payoff of $600 or more, the "300" rule used to be applied to the amount of just one of the multiple combinations (such as $1) instead of to the total bet amount that paid for all the combinations (such as $16).  Now it's the other way: the payoff on a single multi-combo bet of $16 would have to be $4,800 ($16 x 300) to trigger the tax form.

Question of the Day - 06 April 2017

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