AGA Urges Administration to Adjust Antiquated Slot Reporting Threshold as Part of Regulatory Reform Effort

WASHINGTON – The American Gaming Association (AGA) welcomed today the Executive Order of the Trump Administration to immediately define legislative changes to encourage occupation development and economic growth. As a result of the COVID 19 pandemic, the US game sector was one of the economic sectors most affected, requiring the temporary closure of all 989 commercial and tribal casinos across the country.

Bill Miller, the President and CEO of the American Gaming Association said “As the gaming industry reopens safely and strives to regain its financial health one of the crucial aspects of the government’s regulation reform is the modernization of the $1,200 slot jackpot reporting threshold that has been in place since1977. “The current threshold is outdated, and both the Internal Revenue Service (IRS) and the gamer industry face significant compliance burdens.

The AGA urged the Treasury to update the threshold of the slot jackpot reporting again aligned with inflation, for example $5,000 last year. The higher threshold would allow the IRS not only to concentrate on taxpayers more likely getting net slot income at the end of the taxable year, but would also significantly minimize the interactions between gaming employees and employers needed to submit taxation forms.

“It has always taken long before the pandemic, which is now of special significance when the entertainment sector emerges from that crisis, to help the bipartisan congressional leaders.”

Background

• The regulations of the federal government require the employer to complete a W-2 G reporting form, when the casino patron wins $1,200 or more slot machine jackpots, to be temporarily taken out of production.

• Although Slot jackpots have steadily increased in recent decades due to inflation, since its establishment in 1977 the $1200 threshold for issuance of tax forms has remained static. A $1,200 jackpot in 1977, if adjusted for inflation, would be equivalent to over $5,000.

• Since the threshold hasn’t been monitored by inflation, the number of reportable jackpots has substantially enlarged, creating more operational inefficiencies and adding W-2 G forms to the sea, which currently flood an underfunded and understaffed IRS annually.