Nevada Rep. Titus Introduces New Slot Winnings Tax Legislation

The Shifting Limits on Thresholds (SLOT) Act was recently introduced by Representative Dina Titus (D-NV) and a few other congress members. The purpose of the SLOT Act is to increase the tax threshold for slot winnings, which is currently set at $1,200.

A new higher taxable winnings threshold, if approved, would be beneficial for both casino operators and players. Dealing with the paperwork for each small slot jackpot is a process disliked by all parties involved.

SLOT Act a bi-partisan bill

Titus isn’t the only one trying to pass this legislation, which Nevada casino patrons would likely approve of. The SLOT Act was also presented by Representatives Guy Reschenthaler (PA-14), Anthony Brown (MD-04), Mark Amodei (NV-02) and Steven Horsford (NV-04).

PA’s Rep. Reschenthaler says:

Both Pennsylvania’s gaming industry and its patrons are negatively affected by the 1977 slot jackpot reporting threshold.

The threshold failing to keep pace with inflation has led to a significant rise in reportable jackpots, causing tax burdens for winners and compliance issues for casinos. By raising the threshold, we can reduce this excessive bureaucracy, guaranteeing the gaming industry’s ability to maintain well-paid jobs and stimulate economic growth in southwestern Pennsylvania and nationwide.

Including representation from bigger states such as Pennsylvania could be a crucial element of the strategy to ultimately get a higher taxable threshold approved.

This concept isn’t novel. Back in 2020, the U.S. Treasury Department was instructed by Congress to explore the possibility of increasing the reporting limit. Although significant for slot players and casino operators, Congress may have more pressing issues to address.

Many Americans are currently concerned about inflation. This might be an opportune moment for Congress to provide relief to a specific part of the economy.

Tax threshold last updated in the 1970’s

The IRS tax reporting threshold of $1,200 has remained unchanged for 45 years, since 1977.

Just for perspective, the compact disc celebrated its 40th anniversary this week. Interestingly, this milestone hasn’t been revised since the introduction of a now obsolete media form. That’s astounding.

According to the US Inflation Calculator, the number would be $5,957.23 if the reporting threshold was rigidly adjusted for inflation.

Titus stated in a declaration:

The number of jackpots hitting the threshold that triggers a machine shutdown and requires the patron to complete excessive paperwork has significantly increased due to inflation.

This imposes an unwarranted strain on the gaming industry, which is a major economic catalyst for Southern Nevada and other national communities hosting slot machines. Although I am in support of imposing suitable taxes on winnings, increasing the threshold would lessen the paperwork and guarantee a more efficient execution.

In 2025, $1,200 doesn’t stretch as much as it did in 1977. At the very least, it seems fair for gamblers to adjust for inflation. Moreover, casino staff would be afforded spare time for other responsibilities.

Titus aims to raise the reporting threshold for slot players to $5,000. This W2G tax reporting limit is also applicable to video poker and keno players.

Handle tax bill also on tap

Dina Titus (D-NV) and Guy Reschenthaler (R-PA) also presented another bill to Congress as co-Chairs of the bipartisan Congressional Gaming Caucus. They are seeking to reintroduce legislation to eliminate the 0.25% excise tax on all legal sports bets.

This is commonly referred to as the “handle tax” imposed on sportsbook operators nationwide. Besides this tax, these operators also pay a yearly tax of $50 per employee.

To put it in perspective, sportsbook operators in Nevada paid almost $22 million in “handle taxes” in 2022, which was nearly twice the total for the state in 2019. Additionally, this amount was more than four times higher than the national average.

Nonetheless, this extends beyond just a Nevada sports betting concern. Currently, 33 states around the nation have legalized sports betting, with more expected to join each year.

Rep. Titus said:

Given the rapid expansion of sports betting nationwide, it is high time we abolish the handle tax that unfairly burdens legal gaming operators and penalizes sportsbooks for generating employment.

As the Co-Chair of the bipartisan Gaming Caucus, I am advocating for this legislation to maintain the growth of legal gaming markets across the country and assist local economies in benefiting from this expanding industry.

This legislation may not have a direct impact on gamblers. Nonetheless, it could potentially propel the sports betting industry forward by saving money for sportsbook operators, which can then be used to enhance customer service and technology.

Congress passing either or both bills will be determined over time.