The Association of Gaming Equipment Manufacturers (AGEM) has written to industry stakeholders to warn about potential discrepancies between the new federal tax reporting threshold for gambling winnings and the way states require casinos to report.
The provision included in the One Big Beautiful Bill Act raised the minimum amount that needs to be reported as a jackpot win on a slot machine in a land-based casino for the first time in nearly 50 years, from its original $1,200 to $2,000. That change, confirmed by the IRS in December, was effective Jan. 1, 2026.
In an informational letter sent Jan. 5, AGEM President and CEO Daron Dorsey outlined the key details surrounding the tax changes with the aim of helping commercial and tribal operators, regulators and legislators across the U.S. The association told SBC Americas that it disseminated the letter “in hopes of minimizing disruption or confusion associated with these new limits.”
Conflicts could arise, cautions AGEM
AGEM, which represents gaming suppliers across the country, stressed that although the new federal threshold for reporting slot machine jackpot wins on W-2G forms is now in effect, state regulators could be slower in implementing changes in response. Some state reporting requirements may stand in conflict with the new federal rate.
“Despite the changes to federal law, several jurisdictions still retain the $1,200 amount for withholding and reporting, whether by statute or regulation,” Dorsey warned. “Similarly, many states and local jurisdictions maintain similar withholding requirements aligned with the lower $1,200 amount within their jurisdictions, whether for child support obligations or similar public policy concerns decisions chosen in each.
“To date, none of those amounts have been revised or changed and remain in place, meaning licensed suppliers are obligated to comply with those reporting thresholds until amended, regardless of changes made in the Act.”
AGEM acknowledged in the letter that, as a result, suppliers with a presence across the country face needing to update their software and hardware across numerous jurisdictions to meet each region’s own requirements. The association added that, given the scale and scope of the federal change and potential future state changes, the industry should expect that “inadvertent mistakes or unintentional errors” might occur.
Could further slot tax reporting changes follow?
In addition to raising the threshold reporting amount to $2,000, the provision in the One Big Beautiful Bill Act stipulated that the dollar amount will increase in line with inflation at the start of every year from 2027 onwards.
Dorsey noted that continued regulatory efforts and/or potential legislation at the federal level to increase the threshold higher could continue, in addition to the upward adjustments already mandated for future years.
The American Gaming Association (AGA) called for a “long-overdue” increase in the threshold for years prior to the 2025 change, and wanted a significantly bigger raise than the $800 hike that ultimately went into effect. $1,200 in 1977, when the previous threshold amount was set, equates to roughly $6,500 in 2026, per the Bureau of Labor Statistics. The AGA advocated for the new limit to be $5,000.
Nevada Rep. and Congressional Gaming Caucus Co-Chair Dina Titus also advocated for that higher amount, telling SBC Americas last year that $2,000 was “inadequate.” Titus filed her Shifting Limits on Thresholds (SLOT) Act again in 2025, pushing for $5,000 to be the new threshold, and she vowed to continue to advocate for the legislation.
