Las Vegas, Casinos, Gamblers Get Huge IRS News (Jackpot)
Don't want to tell the IRS about your jackpot from the casinos? You may not have to (which Caesars, MGM, and others should love).
Slot-machine players pump their money into the so-called one-arm bandits because they want to win a jackpot. It's a rare occurrence -- MGM Resorts International (MGM) - Get MGM Resorts International Report and Caesars Entertainment (CZR) - Get Caesars Entertainment Inc Report did not build Las Vegas/global casino empires by being generous -- but when it happens, the thrill makes all the losses worthwhile.
When you play the slots, you hope to see three 7s, or whatever the winning combo might be. When that happens, and you hit the big jackpot, there's that moment of elation, followed by a period of waiting if you won more than $1,200.
It's a sobering moment that tempers the joy of your big score. If your win exceeds $1,199,99, your machine locks and you get the dreaded "wait for attendant" note on the screen. That wait, for some reason, is rarely short. And when the attendant does show up, it's to take your personal information in order to report your win to the Internal Revenue Service.
Nobody having a good time wants to involve the IRS (the organization doesn't seem as if it knows how to party). Now, a new bill being introduced in Congress would make you less likely to have to report your winnings.
Congressional Gaming Caucus Wants to Raise the IRS Ceiling
When you hit a jackpot that touches the $1,200 level, you get issued a tax form and your win gets reported to the IRS as income. That means you pay taxes on it at whatever rate you pay.
You can, of course, offset your win with any gambling losses. That's not something you track. But all the major casino companies, including Caesars and MGM, do track your gambling and enable you to download a report (as long as you are a member of their loyalty programs who plays while logged in).
Doing any of that makes something that's supposed to be fun a little less so. And now, Congress members Dina Titus (D-Nevada), Guy Reschenthaler (R-Pennsylvania), Anthony Brown (D-Maryland), Mark Amodei (R-Nevada), and Steven Horsford (D-Nevada) have introduced the Shifting Limits on Thresholds, or Slot, Act. This bipartisan legislation would raise the threshold for slot winnings.
“The current threshold for reporting slot winnings was set at $1,200 in 1977 and has not been updated in the 45 years since. If indexed for inflation, the threshold would be around $5,000," Titus said.
"Due to inflation, the number of jackpots hitting that threshold, triggering a shutdown of the machine and necessitating excessive paperwork requirements for the patron, has increased dramatically."
And while changing the rule would result in less income for the government, it would provide benefits for the casino industry.
“This creates an unnecessary burden on the gaming industry, an economic driver for Southern Nevada and other communities nationwide where slot machines exist," she said.
"While I believe appropriate taxes should be collected on winnings, raising the threshold would reduce paperwork and ensure this is accomplished more efficiently."
Technically, You Still Owe the IRS
Raising the threshold on jackpots means that no paperwork reporting your wins to the IRS would be generated. Technically, you owe taxes on any income, but from a practical perspective, this would mean that a lot of smaller jackpots don't get reported.
That's good for Caesars, MGM, and the gaming industry because it cuts down on work (and eliminates a period where someone just won big and their machine locks while they wait for an attendant).
“The 1977 slot jackpot reporting threshold hurts both Pennsylvania’s gaming industry and its patrons,” said Reschenthaler.
“Because the threshold has not kept up with inflation, it has resulted in a drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos.
"Increasing the threshold will eliminate this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs and foster economic growth in southwestern Pennsylvania and across the country.”
It's very rare for the government to want less of your money, but the sponsors of this bill see it as good for business, specifically the casinos in their home states, which ultimately leads to more tax revenue.
“We need to ensure our tax code is keeping up with the times, particularly when it comes to the gaming industry," Brown said.
"Updating a 45-year-old threshold on slot winnings is common sense and good governance, that both reflects the decades of economic changes since 1977 and reduces excessive paperwork and reporting requirements. The Slo Act is a necessary modernization of our tax code.”
Topic: Casino gamblers rejoice? Specially big casino (MGM, Caesars) 45 yrs in the makin (Read 1013 times)