SLOT Act Proposes Raising Slot Win Reporting Threshold to $5,000 Starting 2026

The Shifting Limits on Thresholds Act of 2025, or SLOT Act, proposes a significant change to how slot machine winnings are reported to the IRS. Section 2 of the bill amends the Internal Revenue Code (Section 6041) to increase the mandatory reporting threshold for winnings from a single slot machine play from the current $1,200 up to $5,000. This new rule would apply to payments made after December 31, 2025.

Hitting the Jackpot, Dodging the Paperwork?

So, what does this actually mean on the casino floor? Right now, if you hit a jackpot of $1,200 or more on a single spin, the casino has to stop play, get your information, and issue you an IRS Form W-2G, reporting the win to Uncle Sam. Under this bill, that process wouldn't kick in unless your single win hits the $5,000 mark. For smaller jackpots between $1,200 and $4,999.99, you'd still get paid, but the casino wouldn't automatically send that W-2G form to the IRS. It's important to remember, though: this bill changes the reporting threshold, not the taxability of winnings. Legally, you're still supposed to report and pay taxes on all gambling income, whether a form is issued or not.

The Ripple Effect: Casinos, Gamblers, and Tax Revenue

This change touches a few different groups. Casinos stand to benefit from reduced administrative work – fewer W-2Gs mean less paperwork and potentially quicker payouts for mid-range wins. For casual gamblers, it means less frequent tax form hassle for those moderate jackpots. However, there's a flip side. Tax authorities might see a drop in reported gambling income. Raising the threshold significantly could make it easier for winnings under $5,000 to go unreported, potentially leading to less tax revenue collected (the 'Economic Burden' concern noted in analysis). This reduction in oversight also raises flags about potentially making it easier to mask illicit funds ('Oversight Reduction'). State governments that rely heavily on gambling tax revenue might also feel an impact if overall reported winnings decrease.

Keeping Up with the Times (and Inflation)

The bill doesn't just set a new number; it tries to future-proof it. Starting after 2026, the $5,000 threshold isn't fixed. It will be adjusted annually for inflation, rounded to the nearest $100. The idea here is to prevent the threshold from becoming outdated over time due to rising prices, which is arguably what happened to the $1,200 limit established decades ago. This indexing aims to keep the reporting requirement aligned with the real value of winnings long-term.