Why Hasn't the Casino Industry Gotten the Slot Threshold Raised?

In 2017, the pari-mutuel industry was able to get the IRS to change the interpretation of taxable winnings. This resulted in a 90% reduction in the number of W-2Gs issued. Why hasn't the casino industry been able to get the IRS to change the $1,200 benchmark that has been in effect since 1977?

You are quite correct that the IRS regulation that games go into what is known as “IRS lockdown” was imposed in 1977 and has never been revised. According to American Gaming Association Vice President of Government Relations Chris Cylke, that $1,200 would be $5,000 in inflation-adjusted dollars. Hence the desire of some Congresspeople to bring the threshold up to $5K.

The AGA is the lobbying arm of the casino industry and Cylke says, “Modernizing the threshold remains a priority issue for us. We have been lobbying Treasury directly, as well as enlisting support from our allies on Capitol Hill to encourage a regulatory change.”

The AGA isn't going it alone. Casino companies are also lobbying their constituent lawmakers directly.

In addition, Nevada Representatives Dina Titus (D) and Guy Reschenthaler (R) have been pushing for “IRS lockdown” reform for the past several sessions. Kevin Gerson, an aide to Titus, says that the congresswoman petitioned the Treasury Department for a review of the lockdown in June 2020, to no avail, but with a new administration in Washington, D.C., Titus will be making a renewed push.

“Most recently, the AGA worked with appropriators on Capitol Hill to include language regarding the slot tax threshold in the FY2021 omnibus appropriations bill, which was signed into law in December of 2020,” Cylke resumes. “The language directs the Treasury Department to examine using its regulatory authority to update the dollar threshold for tax-information reporting for slot machine jackpots and report the results to Congress. This report is due soon and will inform our next steps about whether this can be accomplished by a regulatory change by Treasury or will require a legislative fix.”

In other words, progress is being made, but slowly, as is usually the case in Washington, D.C.

The reporting requirement is in the Code of Federal Regulations (Title 26, Section 1.6011-3). I am pretty sure the CFR can be changed only through legislative action.

Who really believes Congress will pass something that lowers taxes they get from gamblers? It isn't up to the IRS, though maybe they are influential since they have the burden of the paperwork. But to say "Oh, yeah, we know if the threshhold is raised we won't be collecting as much from the gamblers, but that's fine"...as if anybody would come out in sympathy to GAMBLING (oh, for shame!!).
Sure, some congressmen can stand up and say they are for it, but that's a lottery in itself...like this year they'll let Sen. Foghorn and a few others go on record FOR gamblers, though he and the rest know it isn't going to pass. I hope I'm wrong, but I have no faith this will ever come to pass. Prove me wrong....PLEASE!

Mufasa ThedogJul-20-2021
Pari-Mutuels
The point of the question is in the first sentence. The pari-mutuels got it changed, why can't the casinos get it done?

RayJul-20-2021
Really?
Racetrack winnings of only $600 (and 300 X your bet) generates a W2G. So any $2 bet that pays $600 gets a form. Any lesser bet, like a $1 or 50 cent bet that pays $600 counts. And just because you play multiple combinations that add up to many dollars, only one of those is the actual winner. It really isn't that much less restrictive than the slot machine threshhold.

Mufasa ThedogJul-20-2021
Ray-
Ray - The example you give was valid before the change in 2017. For a $1 trifecta box that costs $6, previously the 300 to 1 threshhold was applied to the $1 base bet. Now it is applied to the total bet of $6. So now the ticket is taxed if it pays more than $1,800, not $300.

No legislative action necessary
CFR stands for the Code of Federal Regulations. Regulations are adopted by the regulating body based on authority granted by legislation.

The IRS could change the regulations (after giving public notice and an opportunity for comment) on its own. Congress would not need to enact any new legislation.

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Raymond Jul-20-2021

Cresino

Get our State representatives to do their job and get the change done now Jacky Rosen, Susie Lee, Stephen Horsford and Catherine Cortez Masto. Do something for Nevadans for both parties.

That Don Guy Jul-20-2021

Pretty sure it requires Congress to change

The reporting requirement is in the Code of Federal Regulations (Title 26, Section 1.6011-3). I am pretty sure the CFR can be changed only through legislative action.

jay Jul-20-2021

Tax / after tax

You play with after tax dollars, the casinos pay tax on their hold/profit. This is the same as a furniture maker making a chair that costs him $60 in materials, he sells for $100, and he pays tax on $40 after expenses. The guy that buys the chair might pay a sales tax but he doesn't pay a tax on this being a really nice chair.

A players winnings should be untaxed because he played with after tax. This is double taxation.

On the flip side of this argument the US government is technically bankrupt with multi billion deficits and trillions owed nationally to other countries. They should tax the S**t out of any vice - Tabaco, Alcohol, and Gambling. If you want gun control - tax the S**T out of guns and ammo. Thats more constitutional than messing with the amendments.

O2bnVegas Jul-20-2021

ha ha ha ha ha ha

Who really believes Congress will pass something that lowers taxes they get from gamblers?  It isn't up to the IRS, though maybe they are influential since they have the burden of the paperwork.  But to say "Oh, yeah, we know if the threshhold is raised we won't be collecting as much from the gamblers, but that's fine"...as if anybody would come out in sympathy to GAMBLING (oh, for shame!!).  
Sure, some congressmen can stand up and say they are for it, but that's a lottery in itself...like this year they'll let Sen. Foghorn and a few others go on record FOR gamblers, though he and the rest know it isn't going to pass.  I hope I'm wrong, but I have no faith this will ever come to pass.  Prove me wrong....PLEASE!

Candy

David Miller Jul-20-2021

Really?

 Progress is being made, really? After 44 years, progress is being made? Read that back again and see just how outlandish that statement really is...

Randall Ward Jul-20-2021

not just taxes

of course I pay on all wins not just reported ones, but another problem for some of this is it's effect on Medicare. That extra income is penalized by increased Medicare payments, I'm paying for 2019 now.

Mufasa Thedog Jul-20-2021

Pari-Mutuels

The point of the question is in the first sentence.  The pari-mutuels got it changed, why can't the casinos get it done?

Ray Jul-20-2021

Really?

Racetrack winnings of only $600 (and 300 X your bet) generates a W2G. So any $2 bet that pays $600 gets a form. Any lesser bet, like a $1 or 50 cent bet that pays $600 counts. And just because you play multiple combinations that add up to many dollars, only one of those is the actual winner. It really isn't that much less restrictive than the slot machine threshhold.

Mufasa Thedog Jul-20-2021

Ray-

Ray - The example you give was valid before the change in 2017.  For a $1 trifecta box that costs $6, previously the 300 to 1 threshhold was applied to the $1 base bet.  Now it is applied to the total bet of $6.  So now the ticket is taxed if it pays more than $1,800, not $300.

Kevin Lewis Jul-20-2021

Party like it's 1967

Not surprising, when these are the same lawmakers that have kept the federal minimum wage at $7.25/hr. Their old white guy minds are mired firmly in the past. Maybe they still think you can get into a movie for a dollar or buy a loaf of bread for 39 cents.

Dave_Miller_DJTB Jul-20-2021

Ya know…

If they change the rule to allow gambling losses to offset wins the way I used to, more people would be more honest about their gambling activity when they do their taxes.

And then, raising the threshold on the forms, would not affect the tax collections. Much.

Brent Jul-20-2021

No legislative action necessary

CFR stands for the Code of Federal Regulations. Regulations are adopted by the regulating body based on authority granted by legislation.

The IRS could change the regulations (after giving public notice and an opportunity for comment) on its own. Congress would not need to enact any new legislation.

Question of the Day - 20 July 2021

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