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Internal Revenue Service Wants to Lower the Casino Reporting Threshold to $600
- June 1, 2015 By Oliver Young -
The Internal Revenue Service (IRS) plans to lower the casino reporting threshold to $600 and people as well as the industry can make their complaints on the proposal until the 2nd of June, 2015. This change was first proposed in March in order to bring slot winnings in line with the other reporting requirements now that technology have made tracking slot winnings much easier.
The current reporting threshold for slot games is $1,200, whereas players have to report keno winnings of $1,500 or more. This threshold was set back in 1977 and hence those who oppose the latest proposal say that the level should be adjusted to 2015 dollars i.e. it should be nearly $4,700.
Right after a player wins more than the threshold amount, she or he will have to stop playing and fill out and IRS tax form. The ones responsible for making sure this procedure is fulfilled are venues including Indian casinos, bingo venues, racetracks, video lottery terminals and etc.
Those who are strongly against this new rule have until June 2 to state their opinions on the topic or show at a hearing in Washington D.C. on the 17th of June. Afterwards, the final decision will be made by the tax agency and the public won’t have a chance to say much about it.
Interruption Will Affect Casino Profits
A player who has hit the jackpot at SugarHouse Casino revealed that the process of filling the tax form takes approximately five minutes. Nevertheless, representatives of the casino industry claim that these interruptions can negatively affect casino profits since players will spend time filling the form instead of playing casino games.
The general manager of the casino, Wendy Hamilton, said that around 1,700 players each month fill out W2 formats after winning more than $1,200. However, Hamilton pointed out that under the proposed rule “that number would grow to 10,000 a month.”
One of the strongest enemies of the new threshold is the American Gaming Association which has already criticized it on several occasions. Its spokesman, Chris Moyer, said that not only the casinos weren’t getting paid, but the state would lose money together with the local government. Therefore, he concluded that this proposal “would be detrimental to local and state governments and the revenues they receive from the gaming industry.”
The New Threshold Will Make Things Worse for the Already Declining Slot Revenues
Morowitz Gaming Advisors LLC analyst Cory Morowitz claims that this new threshold would have real negative effects to the gaming industry. According to Morowitz the proposal would “only make matters worse” for the already declining slot revenues.
It has to be noted that Keno players will have the chance to deduct the wagered amount on the winning game before they report winnings of $600. However, this option is not available to those who will play slots and bingo.
This rule change, if it passes, would apply to electronic games only, whereas mechanical slots would keep the current threshold of $1,200.