IRS raises slot reporting threshold for the first time in 48 years

• The slot-win reporting threshold will finally be raised to $2,000 after nearly 50 years of stagnation
• The new rule would open up resources and make casinos and patrons’ lives easier
• However, the new rules also anticipate a reduced deductible amount when it comes to gambling losses - creating a fresh, and potentially worse problem

This took a while.

The slot-win reporting threshold has been increased for the first time in 48 years, with the Internal Revenue Service (IRS) confirming that the figure would change from $1,200 presently to $2,000 after New Year's.

The move is welcome, as it will free up a lot of casino space resources, which can be spent on making guests feel better and safer rather than slogging through the red tape.

Slot reporting threshold to be finally raised to $2,000

The slot-win reporting threshold has not been changed in 48 years, which means that it has hardly kept up with inflation figures since it was originally introduced in 1977. The new rules will come into effect on January 1, 2026, and have been a long called-for change.

However, not all changes are for the better, industry types grumble. Enacted under the One Big Beautiful Bill (OBBB), President Donald Trump’s cornerstone economic law, these new reporting rules also come with a potentially debilitating change for professional gamblers.

Gambling losses, which previously could be deducted up to 100% from a person’s wins, have been reduced to 90%. Meaning that the 10% that is left is no longer deductible. Some professional gamblers have already suggested that this seemingly innocuous change could be all it takes for them to withdraw from their career.

The threshold rule will make it much easier for casinos to operate as they don't have to take off slot machines in busy hours or at least do so less frequently. Once a winning threshold is hit, casinos are obligated to shut down slot machines and start on the paperwork, which costs money, time, and effort, and is argued to be largely unnecessary because of inflation figures that have changed from nearly 50 years ago.

In this regard, the OBBB has been welcomed by the industry, but some wrinkles could prove serious. The issue of deductible gambling losses remains. If you end up winning and losing $100,000 in 2025, you would not have to pay any tax.

However, from next year onwards, if you have the same situation, you would owe tax on $10,000, because your deductible gambling losses only cover up to 90% or $90,000.

Trouble in a gambling paradise

Casinos and other gambling establishments are worried because professional gamblers, as few as they may appear to be, are consistent and bring a lot of money to businesses.

The new taxation rule could mean that they stop doing that, resulting in a loss of revenue. How much, it’s not really easy to estimate, but the industry also expects a sort of trickle-down effect that will affect ordinary gamblers.

Losing revenue from professional gamblers would mean that casinos would have to course-correct, which could mean worse odds, fewer jackpot prizes to go around, and other adjustments.

The OBBB is a blessing and a curse - it addresses a long-standing problem at long last, but in the same swoop, it creates new headaches for casinos that could be even worse than the industry faced before the changes.

It is, distinctly Trumpian - bold in changing established rules and ignorant of the consequences.

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