Congress Reintroduces SLOT Act to Raise Slot Machine Tax Reporting Threshold

In a bid to modernize outdated tax regulations in the gaming sector, Congresswoman Dina Titus (D-NV) and Congressman Guy Reschenthaler (R-PA), co-chairs of the bipartisan Congressional Gaming Caucus, have reintroduced the Shifting Limits on Thresholds (SLOT) Act. This proposed legislation seeks to raise the reporting threshold for winnings on slot machines from $1,200 to $5,000 and index it to inflation.

Current Regulations Are Woefully Outdated

The USA’s current $1,200 reporting threshold dates back to 1997. However, adjusting for inflation would make the sum equivalent to roughly $6,277, according to the Bureau of Labor Statistics. Despite this economic shift, the reporting threshold has never been changed, resulting in increasingly more reportable jackpots and unnecessarily burdening players and casino operators.

Congressman Reschenthaler underlined the impact of this outdated threshold, noting that the increased tax and compliance burdens on casinos led to unnecessary reporting and compliance burdens while souring the player experience with tax and reporting complications. He was adamant the SLOT Act would have a positive nationwide impact, bolstering growth across the casino sector.

Increasing the threshold will eliminate this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs and foster economic growth across the country.

Congressman Guy Reschenthaler

Under the current system, when a player hits a $1,200 or above jackpot, the slot machine must be temporarily taken out of service to process the required W-2G tax form. SLOT Act proponents argue that such outdated measures disrupt casino operations, discourage individuals from engaging with legal casinos, and even indirectly push them toward the unregulated market.

Industry Stakeholders Fully Support the Measure

The American Gaming Association (AGA) has consistently supported efforts to increase the threshold, advocating for a more equitable tax reporting system. They argue that flooding the IRS with automated, outdated forms brings no tangible benefit. Congresswoman Titus shared this sentiment, noting that this measure is a long-overdue fix that should bolster the growth of legal gaming in local and Tribal communities nationwide.

Updating a Reagan-era gaming regulation is a commonsense fix. This legislation will ensure our tax code reflects economic reality.

Congresswoman Dina Titus

In 2023, even the IRS advocated increasing the threshold to $5,000 and indexing future hikes to inflation. Despite widespread industry and regulatory support, past attempts at similar legislation stalled in Congress. However, the gambling industry’s steady growth and the increased attention on modernizing tax codes leave supporters optimistic that the bill will have a better chance in 2024.

If passed, the SLOT Act would mark a significant step toward aligning tax regulations with economic realities. As the bill makes its way through Congress, its advocates are optimistic that lawmakers will see the value in this long-overdue revision. Industry stakeholders and policymakers will eagerly watch whether 2024 will finally bring long-awaited changes to slot machine tax reporting.