Recently, the IRS proposed an idea that would lower the tax-reportable winnings on a slot machine from ,200 to 0, which left casino operators, tribal representatives and players alike throwing their hands in the air in frustration. Geoff Freeman, president of the American Gaming Association referred to the proposal as “far more complicated, onerous and unproductive” to a panel of IRS and Treasury Department officials.
The IRS is hoping this new measure will bring in more money from taxes, but Freeman feels it won’t, due to the big burden it would create. David Bean, a councilman for the Puyallup Tribe said, “It’s as if these regulations were drafted in a vacuum by someone who has no idea about the gaming industry and how it operates.”
One gaming industry consultant, Greg Mullally, feels the industry should be able to shift rather seamlessly into this new era if the proposal does in fact pass. While referencing high stakes slot players who routinely win large payouts, he said, “The Bellagio doesn’t have a change girl sitting in that person’s lap giving him a W2-G every time they pull the handle.”
Instead, through technology, the gambler is recognized through a player tracking device which records the win and unlocks the machine. “Utilizing new technology it is possible to track every play by every player, every coin in, every coin out, every jackpot,” he said. He also feels that soon enough, slot machines will be programmed to spit out W2-Gs automatically.
Freeman said that Mullally’s view “fails to understand the casino marketplace in its current form.” Bean and Freeman both agree that while loyalty cards are great for casinos to market their product to customers, some do not want to be tracked, and will simply walk away.
“I come across many gamblers,” explains Freeman. “Some are excited to participate in these player reward tracking programs and some are like, ‘No, it’s my business. Don’t worry about what I gamble here.’”