Any win in a US casino over $1,200 requires a “hand pay” and the filing of form 1099-G for tax purposes. Now the IRS is considering reducing the reporting rules from that number to $600. Gaming advocates do not feel this change is needed and will only add to the paperwork in an industry that is already overly regulated. The IRS has set a 90 day period for the casino industry to respond to the regulation changes that have been suggested.
There is no guarantee that the revision will actually be made. According to the American Gaming Association Senior Vice President of Public Affairs, Sara Rayme, the potential policy change could create additional burdensome and unnecessary reporting requirements for the industry. Based on current IRS regulations, a casino will need to file tax information forms on winnings of $1,200 or more when playing a slot or bingo game. $1,500 must be reported on keno winnings. These amounts were set back in 1977.
When the amount hits $1,200 on a slot game, the machine will be locked until an IRS form is completed. The game will then be reset. If the jackpot prize point is set to $600 then the games would be shut down more often for players to complete the necessary paperwork for the IRS.
Rayme feels that the changes would be a step backwards for the industry. According to Rayme, the industry would be put at a serious competitive disadvantage in regards to other forms of entertainment that competes for consumer’s discretionary income. If applied, the changes would apply to all casinos, including lottery (VLT) true odds video poker, racetrack venues, Indian casinos, and online winnings which players must report themselves.