Question of the Day - 23 March 2022

The Shifting Limits on Thresholds or SLOT Act refers to legislation introduced by the Congressional Gaming Caucus, headed by two U.S. representatives, a Nevada Democrat and Pennsylvania Republican, that would raise the threshold for reporting jackpots to the IRS from $1,200 to $5,000.

As for predicting its success, frankly, we're a bit pessimistic, at least in the short run.

First, the idea has been kicking around since the Obama administration without making any headway on Capitol Hill. Second, an economic-impact study commissioned by Congress from the Department of the Treasury in December 2020 and due in a year has yet to be submitted. Third, hourglass sand continues to run on the present Congress and the chances for major legislation to be passed before the midterm election appear slim, especially given the state of the world at the moment.

The current “IRS lockdown” threshold on jackpots dates back to 1977, when only Nevada had casino gambling — and minimal political clout. The $5K figure would be more in line with inflation over the past 45 years, but will the IRS (or the White House, under heavy fire for deficit spending) give up so much theoretical revenue?

On the plus side, the SLOT Act enjoys some, though not much, support, on both sides of the aisle. And it would have popular appeal with gamblers back home, a growing stratum of the electorate.

But fourth on the minus side, pro-gaming initiatives on the federal level tend to fare poorly in election years. And if control of Congress flips to the Republican Party in November, as is currently expected, the chances for the SLOT Act are dimmer still, given the deep-seated opposition to gambling that still runs through the GOP.

“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,” said American Gaming Association President Bill Miller, a conservative Republican. Let’s hope others in his party are listening.

Meanwhile, the ball is in the Congressional Budget Office’s court. When the CBO determines how much revenue will be lost, then we’ll truly know if the SLOT Act has a chance or not.