The casino gambling industry is starting up its recovery efforts from the recent coronavirus shutdown. President Trump is doing everything in his power to help the process in the US. Allegedly, he is trying to loosen certain regulations that may ‘stagnate economic recovery.’
Interestingly, this has prompted the American Gaming Association (AGA) to contact the Trump administration. The issue is an antiquated gaming tax policy. Enacted almost 45 years ago, land casino resorts are required to issue tax forms for slot machine wins of $1,200 or more.
Is The American Gaming Association Really Pushing for Slot Tax Form Review?
The AMA wants the government to increase that amount as an adjustment to inflation. That would raise the winning amount to $5,000 or possibly even higher. AGA President and CEO Bill Miller believes the proposed change would offer more than just financial benefits. This is in light of trying to move the gaming industry forward from the impact of COVID-19. He went on to state:
“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.”
Going back to August of last year, Miller penned a letter to David Kautter. He is the Assistant Treasury Secretary for Tax Policy. In that correspondence, he estimated that the IRS receives close to two million W-2G forms. These are used to report winnings from any form of gambling.
Slot wins of $1,200 or more are subject to a 24 percent flat tax. Gambling losses are tax deductible. Yet, the same W-2G forms do not account for any gambling losses.
This is not the first time this issue has been addressed. Lawmakers represent districts with huge gaming influences. US Rep. Dina Titus (D) represents Las Vegas. Another US Rep. Darin LaHood (R) covers gambling interests in Illinois.
Both politicians contacted Kautter as well to update the regulation. They cited that the low threshold causes both administrative and operational backlogs. In a joint statement, they concluded:
“When a player hits a jackpot on a slot machine above the $1,200 threshold, the machine locks up and stops play. Staff must issue a W-2G form to the player and validate its accuracy. Raising the threshold would reduce the paperwork burden on businesses and players while ensuring the tax code reflects current economic realities.”
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This is just one of the gaming policies under review by the AGA and legislators. Casinos had issues receiving economic aid from the recent CARES Act.
Ultimately, this gave small business owners economic relief from the coronavirus impact. The Small Business Administration (SBA) was following a 25-year old regulation prohibiting loans to gaming operations.
Legislation was filed to change this regulation. The SBA softened its stance on this issue to allow gaming businesses to receive the necessary relief loans. Full House Resorts was one of the beneficiaries. They received more than $5.5 million in forgivable loans.