"Today's final IRS regulation is a big win not only for gaming companies and millions of casino visitors, but also for state and local governments who would have received fewer gaming tax dollars as a result of what would have been burdensome federal requirements," commented Geoff Freeman, president and CEO of the gaming association.
CLEVELAND, Ohio - The Internal Revenue Service has dropped a proposal to require casinos and racinos to report to the agency when slots, bingo and video lottery players win $600 or more.
The agency will maintain current federal regulations, set in 1977, that say a casino must file tax information forms on winnings of $1,200 or more on a slot machine jackpot or bingo game, and winnings of $1,500 on a game of keno.
The new rules were proposed in 2015 and more than 14,000 written comments were received, said the agency, which released its final regulation Thursday on the proposal for tax reporting of winnings.
The American Gaming Association had strongly opposed the new rules.
Officials for the trade group that represents the gaming industry said the proposal could costs states millions in gaming revenue.
That is because when someone hits a jackpot, the machine locks up until IRS forms are filled out and the game is reset, they said. During that down time, no one can play the machine.
All gambling winnings, no matter the amount, are considered taxable income and must be reported, the IRS said. The government relies on winners to be honest and report winnings under the reporting threshold.
The final IRS regulations:
"Today's final IRS regulation is a big win not only for gaming companies and millions of casino visitors, but also for state and local governments who would have received fewer gaming tax dollars as a result of what would have been burdensome federal requirements," Geoff Freeman, president and CEO of the gaming association, said in a statement on Thursday. "Our grassroots campaign mobilized thousands of casino customers, members of Congress from 11 states urged restraint and compelling research demonstrated that the tax threshold should be at least $4,700 when adjusted for inflation. We look forward to continuing to work with the IRS and our federal partners to modernize regulations and protect millions of casino customers around the country."