SLOT Act Raises Slot Machine Tax Reporting Threshold to $5,000 Starting 2026

The aptly named Shifting Limits on Thresholds Act of 2025, or the SLOT Act, is making a significant change to how casinos and other gaming businesses handle tax paperwork for slot machine winnings. Essentially, it raises the bar for when they have to file a tax information return (like a W2-G) with the IRS.

The New Jackpot Paperwork Limit

Right now, if you hit a jackpot on a slot machine, the casino has to file a report with the IRS if the winnings cross a certain, much lower threshold. This bill changes that rule dramatically. Under the SLOT Act, businesses won't have to file that tax information return unless the winnings from a single play hit at least $5,000. This new limit kicks in for payments made after December 31, 2025.

Think about the last time you were at a casino. If you won $1,500, you likely had to wait for the attendant to process some paperwork before you got paid. This bill is aimed at eliminating that administrative step for the vast majority of medium-sized wins. For the casino industry, this is a major administrative win, cutting down on the paperwork and staff time required for payouts between the old limit and the new $5,000 mark. For the average person hitting a smaller jackpot, it means a faster payout and less immediate tax entanglement at the machine.

Keeping Up with Inflation

One of the smarter details tucked into this bill is the inflation adjustment. Starting in calendar years after 2026, that $5,000 reporting threshold won't stay static. The bill mandates that the amount be adjusted annually to keep pace with inflation using a standard cost-of-living formula. This is key because it prevents the threshold from becoming meaningless a decade from now. To keep the numbers clean, any increase calculated will be rounded to the nearest $100.

This automatic adjustment is good policy, ensuring that the regulation stays relevant without requiring Congress to pass a new law every few years. It recognizes that $5,000 today won't buy the same amount of groceries or cover the same amount of rent in 2035, and the reporting requirement should reflect that reality.

The Trade-Off: Efficiency vs. Visibility

While this change offers clear benefits in efficiency and convenience, it does create a trade-off. The IRS relies on these automatic reporting forms to track gambling income and ensure people pay taxes on their winnings. By raising the reporting threshold to $5,000, the government loses automatic visibility into a large number of transactions—all the wins between the current threshold and $5,000.

This doesn't mean the income isn't taxable—it absolutely is. But it shifts the burden of tracking and reporting these smaller wins entirely onto the individual taxpayer, rather than having the casino automatically flag the income for the IRS. For busy people, this means if you hit $4,000 on a slot machine, you still need to keep meticulous records and report it on your tax return, even though the casino won't be sending a copy of the win slip to the government.