Tax-Related Gaming Legislation The SLOT Act (H.R. 3125) would modernize the Tax Code by increasing the tax reporting threshold for slot jackpots to $5,000 and provide a mechanism for future increases based on inflation. This change will ease operational and paperwork burdens on casinos and their patrons and enable the IRS to focus its limited resources and staff on filers most likely to have net slot winnings and owe taxes at the end of the year. The current threshold for reporting slot winnings was set at $1,200 in 1977 and has not been updated in 45 years. Accordingly, when a casino patron wins a slot machine jackpot of $1,200 or more, the machine immediately shuts down, and a casino employee must issue that patron the tax reporting form known as a W-2G. This threshold has not been updated in the 45 years since, and if indexed for inflation, the threshold would be around $5,000. Due to inflation and this stagnant requirement, the number of jackpots hitting that threshold, triggering a shutdown of the machine and necessitating excessive paperwork for patrons, has increased dramatically. This has also led to a deluge of W-2G forms inundating an under- budgeted and understaffed IRS every year. The bill was endorsed by the Indian Gaming Association (IGA), California Nations Indian Gaming Association (CNIGA), Santa Ynez Band of Chumash Indians, Choctaw Nation, Chickasaw Nation, Kalispel Indian Tribe, and the American Gaming Association (AGA). The bill has been referred to the House Committee on Ways and Means. There has been no hearing on the bill in the 118 th Congress. The Discriminatory Gaming Tax Repeal Act (H.R. 1661) would repeal the outdated gambling excise tax. Congress enacted the wagering excise tax in 1951 to target organized crime and discourage gambling. Over the past 70 years, provisions concerning the wagering excise tax have been amended to exempt parimutuel wagering, effectively exempting bets on horse and dog racing activity and state- sponsored lotteries. The wagering excise tax assesses 0.25 percent of the amount of money wagered on a sporting event and an additional $50 annual tax for every employee engaged in receiving wagers on behalf of any legal sports betting operator. The law has also been found to apply to pull tabs and certain lotteries. In the late 1990s and early 2000s, Tribal Governments fought the application of the wagering excise tax to wagers on pull-tab games conducted by tribal gaming enterprises. Tribal Governments have argued that since state lotteries are expressly exempt from the wagering excise tax and IGRA requires that the wagering excise tax must be applied to Tribal Governments “in the same manner as such provisions apply to States,” Class II pull-tab games should also be exempt from the tax. Nevertheless, in Chickasaw Nation v. United States , the U.S. Supreme Court held that tribal governments are subject to the wagering excise tax. The wagering excise tax imposes the burden of increased operating costs on legal sports betting operations regulated by Tribal and state governments. The bill would eliminate the increased burden of the wagering excise tax on Indian gaming operations that now employ sports betting and effectively overturn the Supreme Court’s misguided 2001 decision in Chickasaw Nation v. United States . The bill has been referred to the House Committee on Ways and Means. There has been no hearing on the bill in the 118 th Congress.
8
Made with FlippingBook - Online catalogs