A rule change proposed by the IRS could make a weekend in Las Vegas a little less attractive for Bay Area gamblers. The IRS would like to lower a reporting threshold for certain winnings, and casino owners say it would take a large bite out of their bottom lines.
Right now, anyone who wins $1,200 or more playing a slot machine receives a form W-2G from the casino. The casino pays whatever is left after both federal and state income taxes are deducted. The winner must file the form with his regular annual return; the IRS or the state (or both) will match the casino’s information with the winner’s. Needless to say, if they don’t match, there could be a problem.
The IRS would like to lower that $1,200 to $600. It seems the odds are much better that a slot player will hit the lower jackpot. Casinos will be handing out as many as eight to 12 times the number of W-2Gs if the rule change goes through.
Casino owners have a couple of complaints. They contest that gamblers will stop gambling after they hit the $600 mark. They’ll have to get up, find an attendant and take care of the paperwork — they’re likely to find something else to do after that. Breaking a player’s momentum, casinos believe, could cost them dearly — a 3 percent to 5 percent loss, according to one financial analyst. There is also a certain amount of inconvenience for casinos.
The lower amount also smacks of micro-management from the IRS. That same analyst suggests that the government is telling gamblers that $600 is quite enough money and it’s time to walk away.
The rule is only proposed at this point. Its adoption is not, by any means, a sure thing.
Source: CNBC, “An obscure IRS shift could be bad news for Las Vegas,” Alex Rosenberg, July 4, 2015