The American Gaming Association (AGA) has urged the Trump Administration to change the US’ current slot jackpot reporting threshold.
In its official press release, the Association also said that it welcomes the executive order “to swiftly identify regulatory reform opportunities to help promote job creation and economic growth”.
Current slot reporting thresholds have been in place since the 1970s, and the AGA argues that now is the time for change.
The US gaming industry was hit hard by COVID-19 lockdowns, with all 989 commercial and tribal casinos having to temporarily shut their doors.
AGA President and CEO Bill Miller outlined his reasons for wanting this specific threshold to change, which were as follows.
“As the gaming industry safely reopens and seeks to return to financial health, one critical area of regulatory reform the administration should consider is modernizing the $1,200 slot jackpot reporting threshold, which has been in place since 1977.
“The current threshold is outdated and imposes significant compliance burdens on both the Internal Revenue Service (IRS) and the gaming industry.”
By increasing the threshold, Miller thinks that resources could be allocated better across the board. He continued with the below.
“Last year, the AGA again encouraged the Department of Treasury to update the slot jackpot reporting threshold to a realistic level, in-line with inflation, such as $5,000.
“The increased threshold would not only enable the IRS to focus its limited enforcement resources on those taxpayers who are most likely to have net slot winnings at the end of the taxable year, but would also significantly reduce close interactions required between gaming employees and patrons to issue tax forms.
“This policy change, supported by bipartisan members of Congress, was already long overdue prior to the pandemic, and now has additional importance as the gaming industry emerges from this crisis.”
Times have changed
All US casino players who win $1,200 (or above) on a jackpot must fill out a W2-G tax reporting form. On top of this, the machine which generated this payout is taken out of action for an intermittent period.
The AGA also pointed to the difference in monetary values in 1977, compared to what they are today. It said that the equivalent of $1,200 in said year would be “equivalent to more than $5,000 today” – hence the suggested new threshold.
Mentioning spending power today, as opposed to in 1977, was just one part of the association’s case for reviewing existing rules. It also pointed out that the actual amount of today’s jackpot payouts have increased over the last 43 years.
Both of these factors have, according to the AGA, caused unnecessary problems. It argued the following.
“Because the threshold hasn’t tracked with inflation, there has been a significant increase in the number of reportable jackpots.
“This has led to more operational inefficiencies and adding to the sea of W-2G forms currently flooding an under-budgeted and understaffed IRS each year.”
The American Gaming Association has already cooperated with the government during COVID-19, securing PPP eligibility changes for small gambling businesses in the country.