Federal Legislation to Increase Tax Reporting Threshold for Slot Machines Reintroduced

Posted on: March 28, 2025, 08:16h. 

Last updated on: March 28, 2025, 09:04h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Federal legislation to increase the slot threshold has been reintroduced
  • The current threshold of $1,200 has remained since 1977
  • Inflation makes the current threshold obsolete, supports of the bill say

Federal legislation to update the tax reporting threshold for slot machine wins has been reintroduced to Congress by United States Reps. Dina Titus (D-Nevada) and Guy Reschenthaler (R-Pennsylvania).

slot threshold jackpot Dina Titus
A woman celebrates after winning a $2,050 slot machine jackpot on Oct. 14, 2024, in Las Vegas. Federal legislation has again been introduced to raise the tax reporting threshold on slot wins. (Image: YouTube)

The bipartisan legislation seeks to increase the IRS reporting requirements for casinos from its current level of $1,200 to $5,000. When a slot spin wins a payout over $1,200, casinos are forced to temporarily take the machine out of service to supply the gambler with Form W-2G.

The $1,200 threshold has remained in place since it was implemented in 1977. Titus and Reschenthaler say the nearly 50-year-old reporting trigger is long obsolete.

“Updating a Reagan-era gaming regulation is not just a priority for my constituents in Las Vegas, it is a commonsense fix that affects the growth of legal gaming in local and tribal communities across the country,” said Titus, who co-chairs the Congressional Gaming Caucus with Reschenthaler.

“Shutting down slot machines for low-dollar amounts pushes people toward the illegal market and flooding the IRS with automated, outdated forms helps no one. This legislation will ease the paperwork burden on businesses and players while ensuring our tax code reflects economic reality,” Titus continued.

Threshold Lagging Inflation

When factoring in inflation, the Bureau of Labor Statistics says the $1,200 limit enacted in 1977 is today roughly $6,277.

Because the threshold has not kept up with inflation, it has resulted in a drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos,” Reschenthaler added. “Increasing the threshold will eliminate this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs and foster economic growth.”

Titus and Reschenthaler’s bill — Shifting Limits on Thresholds (SLOT) Act — is a clone of the 2022 bill they filed in Congress. The SLOT Act has gained the support of the IRS Advisory Council.

The Advisory Council facilitates tax discussions between the IRS, Congress, and the public. In May 2024, IRS Commissioner Danny Werfel testified before a House Appropriations subcommittee that he too thinks the tax reporting mandate is archaic.

The federal government’s revenue service has the power to raise the slot threshold without legislation. If it doesn’t, the SLOT Act could force its hand should Congress get on board with the bill and President Donald Trump signs it.

Pros and Cons 

The tribal and commercial gaming industries are supportive of raising the tax threshold. Casinos say the W2-G reporting requirement creates burdensome paperwork for the casino and interrupts a slot player’s play. Taking machines offline additionally leads to reduced revenue for the house.

Unions representing slot attendants, however, say a higher threshold will lead to fewer jobs. Slot reps also argue that their members would see less tip revenue, as it is customary for a slot winner to give a gratuity to the casino employee assisting in the W2-G completion and cash payout.

Titus and Reschenthaler have also introduced federal legislation to remove the federal sports betting excise tax placed on every legal wager made in the country. That effort, which began in 2019, has also not taken hold in Congress.