HomeGambling IndustryThe IRS could raise tax threshold for slot players in the US

The IRS could raise tax threshold for slot players in the US

2 min. read
Tax purposes

The United States’ monolithic tax system has been operating with unyielding if lethargic efficiency, and gamblers have not been spared the all-seeing eye of Uncle Sam. Now, though, the taxation regime for gamblers may change in such a way as to give some wiggle room to casino players, and specifically slot players, who have been subject to a rather ossified 1977 rule on how their winnings should be taxed.

Presently, a W-2G tax form must be filed directly at the casino for any payout matching or greater than $1,200. This, though, could soon change, as the Internal Revenue Service (IRS) is seriously considering raising this threshold, accounting for inflation over the decades since the original rule was implemented.

In other words, the IRS could be raising the threshold for triggering a tax report to $5,000, which is almost the equivalent of what $1,200 was back in 1977. This is confirmed by IRS commissioner Danny Werfel, who said that after receiving a letter from lawmakers, the tax agency has had some time to mull it over.

Of course, there are risks associated with giving so much leeway to gamblers. Some players may be reported to underreport or not report their winnings, which could diminish tax returns. Yet, there is also much good to be had. In theory, even when factoring in purposeful failures to report one’s winnings, the red tape load off the IRS and casinos, as well as consumers, should drive economic growth and gain.

The general consensus is that the 1977 rule is already obsolete as it doesn’t properly reflect present-day market realities. With slots generating the bulk of gambling revenue in the United States, however, it is understandable that any changes in this specific vertical would have to be carried out with the utmost care.

Image credit: Unsplash.com

13 May 2024
2 min. read
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