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Best of John Robison

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Ask the Slot Expert: Call to action against IRS W-2G proposal

20 May 2015

A few weeks ago I reported that the IRS is considering lowering the W-2G threshold on slot winnings from $1,200 to $600. The IRS has a legitimate rationale for lowering the threshold -- $600 is the threshold for sweepstakes and lotteries. Bringing the two tresholds in line eliminates some confusion. The agency also claims that with today's highly automated slot floors, issuing considerably more W-2Gs will not place an undue burden on the casino.

The American Gaming Association disputed the IRS' claim that the lower reporting requirement would not be burdensome and also pointed out that machines will be out of play more often, impacting the revenue the casino earns from the machines -- and the revenue states earn from casinos. The association also calculated that if the $1200 threshold were indexed for inflation, it would be $4,700 today.

In a commentary attached to today's CDC Gaming Report, Jeffrey Compton, publisher and casino consultant, said, "It's time to get the players involved!" Compton pointed out that none of the casinos who have his e-mail address have sent any communications about the proposal and what players can do about it. I too have received many e-mails and mailings about discounted rooms, tournaments and other events in the weeks since the proposal was announced, but nothing from the casinos about the proposal.

Compton posits that this change may actually affect players more than casinos. Casinos already have the procedures in place to issue W-2Gs; they're just going to do it more often. Players, on the other hand, will now get W-2Gs for events that were previously unreported. Quarter video poker players, for example, who thought that they were immune from W-2Gs, will now get one for a royal flush, putting them on a par with dollar video poker players. And dollar video poker players who play the more volatile paytables will now get a W-2G for hands other than royals. Compton furthermore says that multi-hand video poker machines will become "W-2G factories, even for nickel players."

To put it bluntly – players, especially frequent experienced players (that is, the casino’s best customers) are going to be angry about this – and they will be especially angry when they realize that maybe they could have done something. Nobody likes to be in a bad situation that could have turned out differently if someone had appropriately asked for their help!

To this end, Compton put out a call to action and asked his readers to rally the troops of players/citizens/taxpayers/voters. He listed five action items from an email from Sara Rayme, the AGA's Senior Vide President of Public Affairs.

The AGA provided this script for messages to the IRS and Congress, but I encourage you to edit the words as you see fit or, better yet, use your own words.

Together we can stop this proposal.


John Robison

John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

Books by John Robison:

The Slot Expert's Guide to Playing Slots
John Robison
John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

Books by John Robison:

The Slot Expert's Guide to Playing Slots