proposed legislation to elevate the tax reporting threshold for slot machine earnings reintroduced at the federal level
In a bid to modernise the tax reporting system for slot machine wins, a bipartisan group of U.S. representatives, led by Dina Titus of Nevada and Guy Reschenthaler of Pennsylvania, have reintroduced the Shifting Limits on Thresholds (SLOT) Act to Congress. The bill aims to raise the Internal Revenue Service (IRS) reporting threshold for slot machine wins from the current $1,200 to $5,000 and index it to inflation.
The $1,200 threshold, which has been in place since 1977, is equivalent to approximately $6,277 today, considering inflation, according to the Bureau of Labor Statistics. This outdated limit has been a subject of discussion among legislators for several years, with Rep. Titus advocating for a raise to $5,000 since at least 2015.
The SLOT Act forms part of a broader legislative discussion regarding changes in gambling-related tax regulations. The bill complements other legislative efforts by Rep. Titus, including acts that address gambling loss deduction caps. Notably, the latest related legislative package, known as the "Big Beautiful Bill," sought to adjust various tax provisions, including the slot machine reporting threshold increase, but implemented only a smaller increase from $1,200 to $2,000 for slot machine jackpots under the Trump administration’s earlier initiative.
While the SLOT Act continues the push to raise the threshold further to $5,000, it is still pending and forms part of ongoing legislative efforts around gambling tax reforms. The bill awaits further review and potential passage in Congress, with debates ongoing regarding the tax treatment of gambling income and deductions.
Support for the SLOT Act extends beyond the political aisle, with casinos backing the proposal as it reduces burdensome paperwork and maintains revenue. However, unions representing slot attendants argue that a higher threshold could lead to fewer jobs and less tip revenue for their members.
Rep. Titus, who co-chairs the Congressional Gaming Caucus with Rep. Reschenthaler, has stated that updating a Reagan-era gaming regulation is a commonsense fix that affects the growth of legal gaming. If the federal government does not raise the slot threshold, the SLOT Act could force its hand should Congress get on board with the bill and President Donald Trump signs it.
In addition to the SLOT Act, Reps. Titus and Reschenthaler have also introduced federal legislation to remove the federal sports betting excise tax. The IRS Commissioner, Danny Werfel, testified in May 2024 that he thinks the tax reporting mandate is archaic, and the IRS Advisory Council has shown support for the SLOT Act. If passed, the legislation will affect the growth of legal gaming in local and tribal communities across the country.
- The SLOT Act, driven by Dina Titus and Guy Reschenthaler, intends to modernize the Internal Revenue Service (IRS) reporting threshold for slot machine wins from the current $1,200 to $5,000, with adjustments for inflation.
- The $1,200 threshold, equivalent to around $6,277 today due to inflation, has been in debate among legislators for years, with Titus advocating for a raise to $5,000 since 2015.
- The SLOT Act is part of a broader discussion on gambling-related tax regulations, complementing Titus' efforts to amend gambling loss deduction caps. However, its implementation is still pending, awaiting further review and potential passage in Congress.
- Casinos support the SLOT Act, as it reduces burdensome paperwork and maintains revenue, but unions representing slot attendants argue that a higher threshold could lead to job losses and reduced tip revenue.
- The SLOT Act is one of several federal legislations proposed by Titus and Reschenthaler, including the removal of the federal sports betting excise tax. IRS Commissioner Danny Werfel has deemed the tax reporting mandate as archaic, and the IRS Advisory Council supports the SLOT Act.
- If passed, the SLOT Act and the federal sports betting excise tax removal could significantly impact the growth of legal gaming in local and tribal communities across the United States.
