W2-G threshold increasing to $2k - Not ideal, but better than the Current status
While the change to how much a gambler can deduct on their taxes was the One Big Beautiful Bill Act (OBBBA) measure that got the industry hot and bothered, another tweak has been hailed as “a crucial step” in modernizing gaming tax policies and one that does benefit gamblers.
Roughly halfway through the 870-page OBBBA, Section 70433 increases the threshold for reporting jackpot wins on slot machines in land-based casinos.
For the past half-century or so, casinos have been required to issue a W2-G tax form whenever a patron wins a slot machine jackpot of $1,200 or more. The casino also had to immediately shut down the machine in question, offlining it for 20-45 minutes.
Thanks to the change, the minimum threshold for miscellaneous gambling like horse racing, slots and keno have now all been upped to $2,000.
The change included in the OBBBA lifts the threshold amount to $2,000, effective for payments made after Dec. 31 of this year. For years 2026 and beyond, that dollar amount shall be increased in line with inflation, calculated by multiplying the current amount by the cost-of-living adjustment determined under the act for such calendar year, and rounded to the nearest multiple of $100.
The American Gaming Association (AGA) said in a statement on July 11 that the slot reporting threshold change is “a crucial first step toward modernizing outdated tax policies.”
‘Hard-fought win’ a long time coming
“Raising the slot tax reporting threshold to $2,000 and indexing it to inflation is a long-overdue modernization that reduces regulatory burdens and improves the customer experience,” AGA SVP of Government Relations Chris Cylke told SBC Americas. “It’s a hard-fought win for our industry, and we look forward to working on regulatory implementation.”
The AGA, along with other industry stakeholders such as Nevada Congresswoman Dina Titus, has been urging such a change for years.
Back in 2022, the AGA noted that the level set in 1977 of $1,200 “was reasonable at the time, but that amount has not kept pace with inflation and does not make sense in 2022.” Per Bureau of Labor Statistics data, $1,200 limit in 1977 is nearly $6,300 in 2025 dollars.
“Because the threshold has not kept up with inflation, this outdated policy has produced a dramatic increase in the number of reportable jackpots, which has increased the operational costs and associated burdens for casinos, their patrons, and the IRS,” added the AGA in 2022.
2 (thousand) out of 5 (thousand) ain’t bad?
The AGA advocated for raising the slot threshold, as well as other measures, in a letter sent to the Senate Finance Committee in May of this year. However, the small increase to $2,000, 48 years after the original amount was set, is short of the $5,000 threshold it called for.
The industry association noted in 2022 that there is a precedent for using $5,000 as a benchmark for other tax reporting requirements. Poker players are issued a tax form when their net win from one tournament exceeds that amount, and $5,000 is also the amount that triggers withholding with respect to sweepstakes, wagering pools and lotteries.
Meanwhile, Titus filed a bill in March of this year to raise the bar to the AGA’s suggested $5,000: the Shifting Limits on Thresholds (SLOT) Act, co-sponsored by Titus and her Congressional Gaming Caucus co-chair Guy Reschenthaler. Titus asserted that shutting down slot machines “for low-dollar amounts” pushes people toward the illegal market and floods the IRS with automated, outdated forms.
“While raising the slot reporting threshold to $2,000 is a step in the right direction, it is still inadequate,” Titus told SBC Americas on Monday. “The IRS Advisory Council recommended this threshold be raised over $5,000 and indexed to inflation. The current threshold has not been updated since 1977.
“I will continue to advocate for the SLOT Act which adjusts the jackpot threshold accordingly to keep up with inflation and improve the gaming experience for the customer and operator.”
The SLOT Act has made no progress beyond being initially referred to committee in March.
AGA and Titus aligned on tax losses deduction
Another bill of Titus’ that both she and the AGA are hoping makes progress is the Fair Accounting for Income Realized from Betting Earnings Taxation Act (FAIR BET Act), which attempts to permanently restore the 100% loss deduction for gamblers. Again, a major concern cited by the industry is that the OBBBA’s measure risks pushing gamblers into the black market.
Though it publicly supported OBBBA for its other measures such as the slot reporting threshold, the AGA proclaimed support for Titus’ FAIR BET Act.
“The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act,” an AGA spokesperson told SBC Americas last week. “We are committed to working with Congresswoman Titus, other congressional leaders and the Trump Administration to restore the long-standing tax treatment of gaming losses.”
Source: https://sbcamericas.com/2025/07/14/o...tax-reporting/
