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Best of John Robison

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When did the $1,200 W-2G requirement start?

14 June 2010

Hello John,

First I want to thank you for the wealth of information you provide to us gamblers. I never miss your column.

I have two questions I cannot find the answer to on the Internet, or from casino connections I have gained as a player.

1. When was the $1,200 starting amount put in to effect by the IRS for taxes to be collected on wins?

2. Do you think this antiquated amount will ever be raised? As it is far too low with today's gamblers in my opinion. This was most likely put into effect when the 25-cent slots were the heaviest hit. I doubt that is the case these days.

Thank you,
Ed

Dear Ed,

Thanks for the kind words about my column.

I too don't know the answer to your first question. Years ago I asked some casino folks I knew if they knew when the $1,200 limit started, but it was before their times too. One thing, the casino only has to report the win to the IRS if they're satisfied that you provided a valid Social Security Number. They only deduct taxes if you don't provide an SSN or, I think, if you're a foreign national.

As for your second question, I discussed this with the fellow who used to be the slot director at The Desert Inn in Las Vegas. That dates the conversation to the late 1990s. At the time, he said the government would never give up the tax revenue they get from forcing players to declare those winnings.

The economy and our deficit were in much better shape then, so I imagine that there's no chance that the limit will be raised today.

I think you're right that the W-2G requirement was put in place some time in the 1960s or 70s, before computers took over the slots and made $1,200 and up jackpots more common. And it's not fair that a table game player can leave a table ahead by thousands of dollars and be on the honor system to report those winnings. Worse, a table game player can win $2,000 in the morning, lose it in the evening and record a $0 net for the day.

The slot player, on the other hand, has to report the $2,000 win under income and report the $2,000 loss under miscellaneous deductions.

Why does the IRS go after slot players? I think it's because we're the low-hanging fruit. It's easy to have a slot machine lock up when it hits a $1,200 jackpot. It's not so easy to get a dealer to lock up when a table game player wins $1,200.

Best of luck in and out of the casinos,
John


Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.

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