The American Gaming Association has welcomed a Trump administration executive order which calls to swiftly identify regulatory reform opportunities to help promote job creation and economic growth.
Due to the current pandemic the American gaming industry is said to have been among the most impacted sectors of the economy following the temporary closure of all 989 commercial and tribal casinos throughout the country.
“As the gaming industry safely reopens and seeks to return to financial health, one critical area of regulatory reform the administration should consider is modernising the $1,200 slot jackpot reporting threshold, which has been in place since 1977,” said Bill Miller, president and CEO of the American Gaming Association.
“The current threshold is outdated and imposes significant compliance burdens on both the Internal Revenue Service (IRS) and the gaming industry.”
According to the federal regulation, when a casino patron wins a slot machine jackpot of $1,200 or more, the machine is temporarily taken out of production while the patron is required to complete a W-2G tax reporting form.
Over the years the slot jackpots have steadily increased with inflation yet, according to the AGA, the $1,200 threshold has remained static since it was established in 1977.
The AGA believes that due to the inflation not being tacked there has been ‘a significant increase in the number of reportable jackpots’ which is resulting in ‘operational inefficiencies’ and more W-2G forms ‘flooding an underbudgetted and understaffed IRS each year’.
Miller continued: “Last year, the AGA again encouraged the Department of Treasury to update the slot jackpot reporting threshold to a realistic level, in-line with inflation, such as $5,000.
“The increased threshold would not only enable the IRS to focus its limited enforcement resources on those taxpayers who are most likely to have net slot winnings at the end of the taxable year, but would also significantly reduce close interactions required between gaming employees and patrons to issue tax forms.
“This policy change, supported by bipartisan members of Congress, was already long overdue prior to the pandemic, and now has additional importance as the gaming industry emerges from this crisis.”