If there’s one government issue everyone in Nevada should be able to unite in opposition for, it’s the IRS’s new plan to tax slot winnings of half the amount currently required for reporting. At present, slot winnings must only be reported for taxes if they meet or exceed $1,200. Under the US government’s newly proposed plan, that figure could be reduced to $600+.
The Las Vegas Review-Journal op-ed opposes IRS slot winnings tax reform this morning calling for all residents of Nevada (who haven’t already) to stand up in opposition of the proposed tax on slot winnings.
“Today in Washington, the Treasury Department and the Internal Revenue Service will hold a long-awaited public hearing on the tax agency’s plan to reduce the reporting threshold for slot, keno and bingo winnings,” explained the editorial.
“Under current IRS regulations, casinos must report payouts of at least $1,200 on a slot machine jackpot or bingo game and winnings of at least $1,500 in keno.” LVRJ said, “The IRS wants to cut that figure to $600.”
Thousands Oppose New Slot Winnings Tax
According to the report, thousands of public comments opposing the plan have been directed at the IRS over the last three months, coming from the casino industry as well as regular gambling enthusiasts. For the casino industry, such requirements would cost them valuable time in additional paperwork and reporting, while gamblers would stand to lose a great deal of money to the new slot winnings tax.
LVJR called the plan “especially meddlesome” due to the way player’s slot winnings would be tracked. The plan would require every player’s casino club card to maintain complete tracking records of all wagers and winnings, automatically directing that information to the federal government.
“If any of the millions of people who have casino player’s cards thought there was the slightest chance the IRS would get full access to their wagering and spending histories,” read the op-ed, “we’d bet they never would have signed up in the first place. In fact, many gamblers likely have cut up those cards already. Who wants to provide the IRS with even more personal information?”
Geoff Freeman, CEO of the American Gaming Association, issued a comment to the IRS earlier this month. “The gaming industry is aware of no other industry in the country for which the IRS has issued regulations requiring the industry to deploy its customer loyalty program for federal tax collection purposes.”
The editorial compared the reporting of all wagers and winnings via casino club cards to the possibility of Americans being taxed for similar rewards programs at airlines, restaurants and retail outlets. If the millions of Americans who rack up over $600 worth of frequent flyer miles per year were forced to pay taxes on those rewards, LVRJ predicted airlines would be forced to reduce their loyalty programs, and less people would bother taking advantage of them.
It’s the casino industry’s estimation that, if the new slot winnings tax is enforced, the reporting requirements could become too burdensome for many gamblers to even continue playing.
When the issue first arose in March, Wall Street analyst Joel Simkins estimated that IRS slot winnings tax proposal would hurt Las Vegas casinos, each losing more than half a million per year. “While $530,000 per casino is not game changing, the impact on a portfolio of 20 to 30 casinos begins to add up,” said Simkins, who believed the proposal would become a major issue among states with a vested interest in the casino industry.
LVJR went so far as to suggest that the IRS increase the rate of slot winnings that must be reported, rather than reducing it. Taxation and reporting requirements haven’t been adjusted since 1977, when Nevada held a virtual monopoly on gambling in the US.
On closing, the op-ed stated that “any action that results in a tax increase or a tax cut should be authorized by Congress, not through regulatory fiat… We hope the IRS gets an earful at today’s hearing and scraps this nosy, misguided plan.”