The Internal Revenue Service has proposed lowering the reporting level for casino slot machine jackpots from $1,200 to $600.
Typically, when a slot jackpot of $1,200 or more is won, the machine locks up while players endure a time-consuming process of filling out paperwork to ensure taxes are paid on the winnings. If the IRS proposal goes through, players will get to go through the irksome practice for jackpots half that size.
The new reporting level would also apply to wins in bingo and keno. At the moment, wins of $1,500 or more are reportable in keno, the game with the worst odds in a casino, we might add.
Thankfully, the new IRS reporting rules aren’t a done deal. The casino industry has three months to respond to the regulatory changes which were apparently concocted by someone with severe head trauma.
The American Gaming Association, a trade group that represents the casino industry, is expected to dig its heels in on these rule changes. Even the current jackpot reporting threshold keeps players from playing and that downtime, beyond being an annoyance, costs casinos lots of cash (we’re talking millions of dollars here), which translates into lost taxes, which seems to undermine the Internal Revenue Service’s goal in the first place.
According to a Las Vegas Review-Journal story, the IRS “may not believe this is much of an administrative hassle.” Which, we’re thinking, is an indication the IRS understands casinos like the Amish understand iPads.
This IRS rule change may also have consequences beyond the obvious. One of our commenters, Andy Bruinewoud, adds, “It’s an annoyance for U.S. players. It might be a back-breaker for Canadians or other foreign visitors who don’t have withholding tax treaty protections. We pay 30% non-resident tax on winnings. If the threshold gets lowered to only $600, people will either play smaller on the machines or switch to table games. Or, of course, not come at all. Bad for Vegas, where the highest percentage of foreign tourists are from Canada.”
Here’s hoping the American Gaming Association and casinos bring all their resources to bear to make this IRS dipshittery disappear faster than a cheater at Binion’s back when Benny ran the place.