Titus Will Push New Gambling Tax Legislation In Congress

Written By Derek Helling on March 7, 2023
us gambling taxes reporting threshold slots titus

If US Rep. Dina Titus can sway her colleagues, winning while playing slots at online and physical casinos across the country will be simpler. Titus, whose district includes parts of Las Vegas, wants to update the US gambling taxes standard put in place half a century ago.

Specifically, Titus is aiming to raise the Internal Revenue Service‘s reporting threshold for slot jackpots. Titus seems optimistic that she will get support from her colleagues but whether it will be a priority for the 118th Congress remains to be seen.

Current US gambling taxes rules for slot wins

The 1970s were a very different world in many ways. For example, History Channel says that chicken wings covered in sauce were only eaten locally in the Buffalo, New York area and the average price of a gallon of gasoline in 1975 was $0.57 according to the US Dept. of Energy.

In much the same way, legal US gambling fifty years ago consisted of a handful of state lotteries, a nascent gambling scene in Atlantic City, and Las Vegas. Because of the value of the US dollar at the time, winning $1,200 or more while feeding tokens into a slot machine was far rarer than it is in 2023.

That’s part of the reason why the IRS set that number as its reporting threshold for a slot win during that decade. However, that rule has been stuck in time ever since. While buffalo wings have become a national phenomenon and the value of the dollar has dropped, the IRS has held that regulation firm.

Titus wants to change that. She feels she has some allies in Congress, too.

What Titus is proposing

According to Richard N. Velotta of the Las Vegas Review-Journal, Titus wants to pass legislation that would force the IRS to finally update this rule. Under Titus’ proposal, that $1,200 reporting threshold would instantly become $5,000 and the IRS would be required to further adjust it for inflation in the future.

Titus leads the gaming caucus in the US House of Representatives and told Velotta that the caucus will make this a priority. “One of the important things is we’re not just doing this just for Las Vegas, we’re doing it for everybody,” Titus stated.

Titus also conveyed that she isn’t aware of any Congress members opposing her proposal. Whether it will pass will simply depend on how much leadership in both chambers of Congress prioritizes the change.

For gamblers across the country and casino operators, it would be a welcome update.

Why do IRS reporting thresholds matter?

To be clear, all gambling winnings are taxable in the view of the IRS. It doesn’t matter if you made a profit with your gaming or how much you won. It’s the responsibility of every taxpayer to report their winnings and pay the commensurate amounts.

The reporting thresholds have more to do with the entities offering the games rather than the people playing them. Each time someone wins at least $1,200 playing a slot game, casinos must fill out a Form W-2G to stay in compliance with IRS regulations.

That form shares details with the IRS like who won the jackpot and how much they won. Given the frequency of such wins, it creates a lot of work for already overburdened IRS personnel. That’s part of why Titus said she wants to update the threshold.

For physical casino operators, raising the threshold could mean not only less paperwork but more revenue as well. Standard practice at such facilities is to temporarily shut the machine down after someone wins such a prize. That occurs to allow casino staff the time necessary to verify the win and fill out the W-2G.

A higher threshold would reduce such instances. That would mean more machines active more often. Even for online casino operators, such a change would mean less processing.

In the 1970s, $1,200 could buy a lot more chicken wings in Buffalo than it does today. Titus simply wants the gambling taxes rules to keep with the times.

Photo by AP Photo/John Locher/PlayUSA
Derek Helling Avatar
Written by
Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

View all posts by Derek Helling
Privacy Policy