A proposed legislative bill in the US could see the tax reporting threshold on casino winnings increased.
Representatives from Nevada, Pennsylvania and Maryland have come together to draft the Shifting Limits on Thresholds Act – or SLOT as it is cannily to be known.
At the time of writing, if a player wins $1,200 or more on a slot machine they are forced to immediately fill out a W-2G tax reporting form – in order to comply with IRS taxation law that was first implemented way back in 1977.
But under the plans put together by Dina Titus, Steven Horsford and Guy Reschenthaler, they want to modernise the rules and increase the tax reporting threshold to $5,000.
? NEW: @repdinatitus and @GReschenthaler introduced federal legislation today to raise the antiquated slot tax threshold, which has not been adjusted for inflation since 1977.
Read why the AGA supports this commonsense update to gaming regulations: https://t.co/qxh1VETcfH pic.twitter.com/jLnmKwmJdG
— American Gaming Association (@AmericanGaming) March 3, 2022
The Pennsylvania representative, Reschenthaler, commented:
“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.”
Meanwhile, the president of the American Gaming Association, Bill Miller, believes any such change has been a long time coming.
“Increasing the slot tax threshold to account for inflation is a long overdue change that will alleviate unnecessary administrative burdens on casino operators, their customers and an understaffed and overwhelmed IRS.”
The bill will now go to the various House committees to review and vote on, with the Congressional Budget office tasked with determining the cost of implementing the changes – and the amount of tax revenue the government may lose as a result.
A similar bill was filed to both the Obama and Trump administrations, however in either case it was rejected.
Do You Have to Report Tax on Casino Winnings in the US?
As you may have gathered, there is a burden on players to report any winnings they make in bricks and mortar and online casinos in the US.
These winnings are fully taxable, and while losses can offset the amount owed, any net wins must be reported and tax paid upon them.
Do You Have to Report Tax on Casino Winnings in the UK?
In the UK, the rules on paying tax on casino winnings are rather more agreeable.
For the most part, gambling winnings are tax free in the UK, and so you won’t need to declare a single penny to HM Revenue & Customs.
The reason is that the government targets casino brands and other gambling firms directly with their point of consumption tax, meaning that firms have to pay on their gross income in the UK.
Many high street firms are taxed at a rate of 15%, however those that offer online ‘games of chance’ have since seen their slice increased to 21% by former chancellor Phillip Hammond.