NYU Tax Law Center Says Slot Tax Threshold Raised Through ‘One Big Beautiful Bill’
Posted on: July 16, 2025, 05:21h.
Last updated on: July 16, 2025, 07:01h.
- An attorney advisor at the Tax Law Center at NYU Law believes the “One Big Beautiful Bill Act” raises the slot tax reporting threshold from $1,200 to $2,000
- The casino industry has long called for an increase to the slot tax reporting threshold
The gaming industry and its many pundits and online influencers have been in an uproar since SBC Americas seemingly broke the news of a much-overlooked tax provision tucked away in the “One Big Beautiful Bill Act” (OBBBA) that suggested the slot tax reporting threshold will be raised from $1,200 to $2,000 effective Jan. 1, 2026.
SBC Americas’ Tom Nightingale confirmed with the American Gaming Association and Nevada Congresswoman Dina Titus’ office that Section 70433 of OBBBA raised not only the minimum reporting threshold for 1099-MISC filers but also for W-2G forms. Section 70433 enacts an “increase in threshold for requiring information reporting with respect to certain payees” by striking $600 and inserting $2,000.
Casino.org confirmed with the AGA on its position this week, with the trade group saying the section amends “any reporting under section 6041 of the Internal Revenue Code” and that the “slot threshold is tied to that section of the code.”
The discussion online wasn’t so clear. Some accountants and tax professionals opined that OBBBA did not amend Section 3402 of the Tax Code, and that’s the section governing W-2G.
Slot Tax Threshold Clarity
Sophia Yan holds a JD from the University of Pennsylvania Law School and a BA in public policy, with honors, from the University of Chicago. She served as a tax law clerk at the Senate Finance Committee before joining the Tax Law Center at NYU Law.
The Washington, D.C.-based attorney advisor for the Tax Law Center at NYU Law reviewed the OBBBA tax provision in question and had this to say:
I agree with the reading that the slot tax reporting threshold would essentially be raised from its current $1,200 threshold to $2,000 by OBBBA. Form W-2G implements the reporting requirements in the regulations at 26 CFR 1.6041-10, which define reportable gambling winnings at varying thresholds above $600 depending on the type of game. But these regulations implement Section 6041(a) of the Code, which requires reporting of ‘gains, profits, and income’ of $600 or more of the regulations,” Yan said.
Yan explained that while Section 6041(a) does not contain any statutory exceptions or changes based on types of games, “it is arguable that the prior existing slot tax reporting threshold regulations were not in accordance with Section 6041(a) even pre-OBBBA.”
Yan continued:
In any case, the change in the Section 6041(a) as a result of OBBBA appears to re-establish a floor of $2,000 for reporting of all types. A more recent statutory change takes precedence over regulations.”
Yan agreed with an accountant Casino.org previously cited in that Section 6041(a) does not change the contents of Form W-2G itself. However, she says, “The instructions for the form and when it needs to be submitted to the IRS should be updated in accordance with the change.”
The Tax Law Center at NYU Law’s mission is to “bring a public interest perspective and strong legal expertise to consequential tax policy decisions.” The Center’s work includes weighing in on the technical details of tax legislation.
Along with the slot tax threshold increase to $2,000 in 2026, Section 70433 adds that for 2027 and beyond, the threshold will increase in line with inflation. The increase will be calculated by multiplying the current amount by the cost-of-living adjustment determined under the act for each calendar year and rounded to the nearest multiple of $100.
Long Overdue
Both gamblers and casinos want the slot tax reporting threshold increased, as the $1,200 trigger has been in place since 1977. Titus is behind the SLOT Act, a federal bill that would increase the reporting threshold to $5,000, which would still be below what $1,200 in 1977 is equal to today (~$6,600).
Handpays are much more frequent today than they were almost half a century ago, and each time a win of upwards $1,200 hits, the machine is forced to go offline, interrupt a player’s experience, and create burdensome paperwork.
While $2,000 is a start, Titus, her Nevada congressional delegation colleagues, and the AGA will continue to fight in DC for a further, more substantial slot tax reporting threshold.
Last Comments ( 3 )
All of this because someone at AGA misinterpreted the legislation, as written. Section 6041(a) is amended by striking ``$600'' and inserting ``$2,000'' 1099 reporting changes, not W2G's. Even if you want to assume they intended to move into Section 3042, there is still a carve out excluding Slots at subsection q. The legislation, as it is written mirrors 1099 requirements, only the threshold is amended from $600 to $2000. With a change W2G sitting out on an island now, Congress would need to decide if it is willing to walk away from $800+ on a significant number of taxable jackpots paid out in every casino across the country
Changed my mind. The current $1,200 threshhold for W-2Gs appears to be a carved-out exception to the $600 threshold. The $1,200 is in a CFR. The minimum threshold in the USC is now $2,000. Also note that Rep Dina Titus of Nevada had filed a bill named the Slot Act (H.R. 2233) to raise the threshhold by adding a new subsection to USC 6041. That method wouldn't work unless USC 6041 applied to gambling. I agree with Yan that since the new minimum threshold in the law is higher than in the existing reg, that the higher amount should obtain and that the CFR has to be rewritten to conform.
Yan refernces 26 CFR 1.6041-10 which is a regulation pertaining to slot machines, etc.. Congress doesn't amend regulations (CFRs) directly. The BBB amends 26 USC 6041 having to do with 1099s. That's a different thing.