HomePublicationsNewsletter ArchiveNewslettersVolume 23Issue 1IRS Issues Final Casino Tax Regulations

On December 30, 2016, the Internal Revenue Service (“IRS”) officially issued its final regulations on tax information reporting for winnings from slot machines (and bingo and keno). Several controversial proposals were not adopted including:

· The electronic player tracking proposal wherein gambling winnings were required to be reported if (1) the total amount of winnings netted against the total amount of wagers during the same session of play was $1,200 or more, and (2) at least one single win during the session was $1,200 or more without regard to the wager.

· The conceptual idea of lowering reporting thresholds of $1,200 for bingo and slot machine play and $1,500 for keno.

Additionally, the optional aggregation method, payee ID, and other provisions, appear in the final regulation, to incorporate many of AGA’s technical suggestions, such as use of gaming day for optional aggregation.

According to the AGA, state and local governments would have received fewer gaming tax dollars as a result of the proposals set forth by the IRS. In response to the proposals announced by the IRS nearly two years ago, the AGA organized a grassroots campaign, met with members of Congress from eleven states and facilitated research that concluded a more appropriate tax threshold should be at least $4,700 when adjusted for inflation.

“We look forward to continuing to work with the IRS and our federal partners to modernize regulations and protect millions of casino customers around the country,” said AGA President & CEO, Geoff Freeman.

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