Imagine for a second you’re playing a slot machine. You hit a couple big wins and are suddenly sitting on a few hundred bucks. Then you hit a $600 win. You’ve already won $500, so the $600 is icing on the cake. All seems amazing until the machine freezes. No, it’s not broken. It’s just Uncle Sam coming to take his piece.
Seems far-fetched? It’s not. A new proposal from the IRS means that the second a $600 jackpot is triggered (or anything higher), a tax form called a W-2G is filed. That form exists today. It’s filed at $1,200 or higher, but the change would mean a win of just $600 would trigger the form.
That has Las Vegas worried because it could very well have an effect on the experience of slots games. When you’re in the zone, you’re in the zone. You’ve got a beat that you’re playing to. A rhythm, if you will. It’s working for you. And then suddenly, all comes to a grinding halt because of some silly IRS rule.
But it’s not just about the player. It’s about the casino worried about losing money. If you win big playing a casino game, you might have a tendency to walk away. While $600 is a lot of money, there’s no psychological block telling you, “Hey, you just won big. It’s time to stop.” But the psychological block does come into play when the machine freezes and the IRS shows up (or an IRS form, more specifically).
When casino players are suddenly told that the amount they won is a big amount, they’re more apt to agree and stop what they’re doing.
The proposal has yet to pass and Las Vegas is definitely not standing by to see if it does. The American Gaming Association has collected more than 100,000 signatures to oppose the proposed change.
The tax law is interesting in the United States. When I was up in Canada, I actually won a $6,380 jackpot playing a slot machine at Fallsview Casino in Niagara Falls. When I went to collect the money, I asked the cashier if there was some sort of tax form I needed to fill out. She said, “No, any money you win is considered a windfall. It’s completely tax free under Ontario, Canada law.”
I could have won a million dollars and not worry about paying taxes to the Canadian government, let alone worry about dealing with tax forms.
But Las Vegas isn’t Canada. It’s much hotter. Hopefully cooler heads will prevail and the $1,200 limit will remain.
Don’t forget, if you win big playing at Slots of Vegas, you’re not immune to tax requirements. Please make sure you understand your tax obligations in your state or country if you win big. We recommend checking with an accountant or a tax lawyer when you get your hands on your winnings. It might be tax exempt or you might need to pay taxes on it, so make sure you know the law.