Rock Ohio buys out minority interests Entity now sole owner of casinos, others

The IRS has proposed requiring casinos and racinos to report slot machine jackpots of at least $600 instead of the current $1,200.

(John Kuntz, The Plain Dealer)

CLEVELAND, Ohio -- Casinos and racinos would be required to report to the Internal Revenue Service when slots, bingo and video lottery players win $600 or more, under a proposed change to IRS regulations.

Under current federal regulations, set in 1977, a casino must file tax information forms on winnings of $1,200 or more on a slot machine jackpot or bingo game, and winnings of $1,500 on a game of keno.

The IRS published the proposed change in the Federal Register this week to update the tax information reporting rules for players' winnings. It is accepting public comments until June 2.

The American Gaming Association announced Friday that it has serious concerns and plans to submit comments. It said the proposal could costs states millions in gaming revenue.

That is because when someone hits a jackpot, the machine locks up until IRS forms are filled out and the game is reset, said Chris Moyer, spokesman for the trade group that represents the gaming industry. During that down time, no one can play the machine, thus the lost revenue, he said.

All gambling winnings, no matter the amount, are considered taxable income and must be reported, the IRS said. The government relies on winners to be honest and report winnings under the reporting threshold.

If a jackpot meets or exceeds the current IRS threshold, the casino or racino reports it. In addition to telling the IRS about the winner and winnings, the casino or racino generally reduces the payout by withholding federal taxes at the 25 percent rate.

In its proposal, the IRS said it was seeking comments regarding the reporting figure, including the feasibility of reducing the reporting threshold, whether electronically tracked slot machine play should have a separate reporting threshold, and if the games' reporting amounts should be uniform.

The IRS apparently "doesn't believe it would be a big deal" to reduce the reporting requirements to $600, primarily because "much of record keeping is handled electronically," Michelle Ferreira, a San Francisco attorney specializing in tax matters, told the Las Vegas Review-Journal.

Ferreira said many slot machine players use player tracking/player loyalty cards, which record activity.