Recently, Representative Dina Titus (D-NV) along with some other Congress members introduced the Shifting Limits on Thresholds (SLOT) Act. The intended aim of the SLOT Act is to increase the tax threshold for slot winnings, which currently stands at a limit of $1,200.
Should it be approved, both casino operators and players would benefit from a new, higher threshold for taxable winnings. The paperwork associated with smaller slot jackpots is a hassle for all parties involved.
SLOT Act a bi-partisan bill
Titus is not alone in trying to pass this legislation, which would be favored by Nevada casino patrons. Representatives Guy Reschenthaler (PA-14), Anthony Brown (MD-04), Mark Amodei (NV-02), and Steven Horsford (NV-04) have also introduced the SLOT Act.
Representative Reschenthaler of Pennsylvania says:
The reporting threshold for the 1977 slot jackpot negatively impacts both the gaming industry and its patrons in Pennsylvania.
The threshold’s inability to keep pace with inflation has led to a significant rise in reportable jackpots. This increase has consequently imposed tax obligations on winners and compliance responsibilities on casinos. By raising the threshold, this tedious bureaucracy can be eradicated, allowing the gaming industry to sustain well-paid jobs and stimulate economic growth in southwestern Pennsylvania and throughout the nation.
Getting a higher taxable threshold approved could be a key part of the plan that includes representation from larger states like Pennsylvania.
This isn’t a novel concept. In 2020, the U.S. Treasury Department was instructed by Congress to consider increasing the reporting threshold. Although this might be significant for slot players and casino operators, Congress might have more crucial issues to address.
Many Americans are currently concerned about inflation. This might be an opportune moment for Congress to provide some relief to a minor portion 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 your information, the compact disc celebrated its 40th anniversary this week. It’s astonishing to realize that this milestone hasn’t been updated since before a now obsolete media format was launched.
According to the US Inflation Calculator, adjusting the reporting threshold strictly for inflation would result in a figure of $5,957.23.
Titus stated in a declaration:
The number of jackpots reaching the threshold that triggers a machine shutdown and requires the patron to complete extensive paperwork has significantly increased due to inflation.
This imposes an undue strain on the gaming industry, a crucial economic contributor in Southern Nevada and other parts of the country where slot machines are present. Although I am in favor of collecting fitting taxes on winnings, increasing the threshold would lessen the administrative load and guarantee a more efficient accomplishment.
The purchasing power of $1,200 in 2025 isn’t as great as it was in 1977. At the very least, it appears fair to adjust for inflation for gamblers. Moreover, this would give casino staff spare time for other responsibilities.
Titus aims to raise the reporting threshold for slot players to $5,000. This W2G taxable 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), the co-Chairs of the bipartisan Congressional Gaming Caucus, have once again introduced a bill to Congress. This time, their proposed legislation seeks to abolish the 0.25% excise tax imposed on all legal sports bets.
This is commonly known as the “handle tax” imposed on sportsbook operators nationwide. Besides this tax, these operators are also required to pay an annual tax of $50 per employee.
For context, in 2022, Nevada’s sportsbook operators contributed almost $22 million in “handle taxes”. This figure was nearly twice as much as the total for the state in 2019. It also exceeded the national average by more than four times.
This, however, extends beyond being a Nevada sports betting issue. In fact, sports betting is currently legal in 33 states across the nation, with an increasing number joining each year.
Representative Titus stated:
Given the rapid expansion of sports betting nationwide, it’s high time to abolish the handle tax that currently penalizes legal gaming operators and unfairly penalizes sportsbooks for job creation.
“As the Co-Chair of the bipartisan Gaming Caucus, I am advocating for this legislation to ensure the prosperity of legal gaming markets across the country. This will aid local economies in enjoying the advantages of this expanding industry.”
This law won’t directly impact gamblers. However, by saving money for sportsbook operators, it could potentially propel the sports betting industry forward. This is because it frees up funds that can be used to enhance customer service and technology.
Congress passing either or both bills will be determined over time.
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