Did you know the handpay jackpot reporting threshold of $1,200 was set in 1977? If you did, you’d probably not find it surprising that a variety of attempts have been made over years to change that threshold to be higher.
While a few years ago, there was a failed effort to actually lower the handpay threshold, the latest effort, by gaming industry leaders to lobby the Trump administration to review the regulation, seeks to raise it.
In some ways this makes sense. inflation inevitably means that what $1,200 was worth in 1977 is not the same now. Bets have gone up, but the magic handpay number has not.
Other laws changes, such as the increase of the standard deduction in 2018, can create challenges for players with occasional gambling and/or handpay scenarios to write off their gambling winnings. Combine that with the continued lower threshold of handpays, and it can create some uncomfortable scenarios for gamblers who truly got lucky.
For higher rollers, it’s been a continual paperwork nightmare, although some casinos have launched Fast Pay, a way to consolidate handpays down to one paper per day per casino, although that can still mean a ton of paperwork for regular gamblers.
So how do you fix it? You can brute force increase the number, but I think it might be time to take a look at how the scenario is handled at table games.
With table games, you only are given paperwork if you win 300x your wager on a single payout. In practice, this is very difficult to achieve. Standard Blackjack, Roulette, Craps bets and so on don’t come close to that 300x. But side bets, like the Fire Bet on a craps table or a side wager on a Blackjack hand for a progressive, could very well break through that threshold. But it’s rare.
So why not have the same rule for slots? Keep the $1,200 threshold but add a second rule: Require the win to be at least 300x your bet. For players betting $5 a spin, that now moves the threshold to $1,500. For $10 a spin, that’d be $3,000.
The biggest challenge with doing this is older games or machines might need programming updates to account for this two step requirement. But many games would need updating anyway if the rules change for what constitutes a handpay.
In the absence of that, a higher number would make sense, even though it will lead to similar problems down the road.
$1 in 1977 is worth $4.23 as I write this, meaning a $1,200 handpay then would be worth a bit more than $5,000 now. If they don’t go to $5,000, we’re still behind the curve. And since I’ve seen many examples in casinos of machines that would not even accept $5,000 to be deposited at a time, I’m sure the odds are any increase would be more limited than that. If so, that’d be a shame.
I’ve won over $40,000 in slots in 2020 that was hand pay out. I have the W-2G forms . I’ve lost alot too but I do not have any of the proof like a
W-2G form does for the wins.
To report this to the IRS, would it be better if I claim to be professional gambler since I live in Vegas ?
I do play the spinpoker slots only about every other day where the payouts can be big as the losses can to. The other taxable income I have is my unemployment benefits since I haven’t worked since March 2020 due to the pandemic. I didn’t have my benefits taxes taken out where as I will owe on these. Can anyone who has knowledge on this point me to the right direction so I don’t get killed owing the IRS my left arm?
Thank you.
Hi Giovanni – I’d highly recommend speaking with an accountant who has experience in these issues. Since you’re in Las Vegas, you’re probably geographically well positioned to find someone who can advise you if filing as a professional gambler (which has certain requirements to meet that they can confirm you do) makes more sense vs. not. But advice on such important issues is best handled by the pros, in my opinion, vs. any opinions I or other gamblers (but not accounting experts) can provide.