Congresswoman Dina Titus (D-NV) and Congressman Guy Reschenthaler (R-PA), Co-Chairs of the bipartisan Congressional Gaming Caucus, today reintroduced the Shifting Limits on Thresholds (SLOT) Act to update the nearly 50-year-old reporting threshold for slot machine winnings by raising it from $1,200 to $5,000 and indexing it to inflation.

"Updating a Reagan-era gaming regulation is not just a priority for my constituents in Las Vegas, it is a commonsense fix that affects the growth of legal gaming in local and Tribal communities across the country,” Rep. Titus. said “Shutting down slot machines for low-dollar amounts pushes people toward the illegal market, and flooding the IRS with automated, outdated forms helps no one. This legislation will ease the paperwork burden on businesses and players while ensuring our tax code reflects economic reality.”

While slot jackpots have increased over the years to reflect inflation, the reporting threshold has not increased since 1977. Currently, every time the threshold is hit, the slot machine must be temporarily taken out of service. By creating unnecessary roadblocks in the legal gaming experience, legitimate customers are incentivized to switch to the illegal market, meaning less tax revenue and more violations of the law.

“The 1977 slot jackpot reporting threshold hurts both Pennsylvania’s gaming industry and its patrons,” Rep. Reschenthaler said. “Because the threshold has not kept up with inflation, it has resulted in a drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos. Increasing the threshold will eliminate this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs and foster economic growth in southwestern Pennsylvania and across the country.”

Background

The SLOT Act would increase the tax reporting threshold for slot jackpots to $5,000 and provide a mechanism for future increases based on inflation. This ease operational and paperwork burdens on casinos and their patrons and enable the IRS to focus on filers most likely to have net slot winnings and owe taxes at the end of the year. The $1,200 threshold has led to a deluge of W-2G forms being submitted to the IRS when most consumers will not even owe any taxes by the end of the year. In 2023, the IRS’s own advisory council recommended that the agency increase the threshold to $5,000 and index it to inflation.

The original co-sponsors of the legislation are Mike Kelly (R-PA), Jeff Van Drew (R-NJ), Jack Bergman (R-MI), Hank Johnson (D-GA), Mike Ezell (R-MI), and Lou Correa (D-CA).