US slots: New tax allowance?

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Peter Brandt March 16, 2023

In the United States, a change in the law is currently being discussed that affects the tax allowance for slot profits. According to the current legal framework, all slot machines that are more than $ 1,200 (USD) must be asserted in the country. Due to the change in the law, the limit is to be raised to around $ 5,000 in the future.

US tax law provides for taxation of any slot machine profits from $ 1,200. ((©Tingey Injury Law Firm/Unsplash)

Increase of over 350 percent

The change in the law goes back to an initiative of the “Congress Gaming Caucus” (CGC) in the US representative house. This deals with gambling matters in the United States and tries through adjustments and reforms To improve processes in national industry. According to media reports, the chairperson Dina Titus and Guy Reschenthaler should be the primary initiators. They would have set themselves the goal of raising the tax allowance for profits to slot machines by more than 350 percent to around $ 5,000.

The two CGC members would be the reason for the targeted change in the law The increasing inflation lead. Since the amount of $ 1,200 still dates from 1997, it does not correspond to today’s economic status quo. According to Reschenthaler, the upper limit could not keep up with inflation, which led to a drastic increase in the reportable jackpots. This development would have an enormous tax burden for the winners.

The casinos and gambling facilities are also negatively affected. Due to the increasing tax reports, they would have one more intensive bureaucracybecause the respective winners have to be tracked. The increase in the tax exemption is accordingly an advantage for all parties involved and would have an extremely positive effect on the growth of the national gambling industry, said Reschenthaler.

The most popular game of chance! According to the CGC members, the increase in the tax-free allowance for slot machines will ensure high relief on all levels. However, if there is no increase, the load should be larger on all fronts. This is not only due to inflation, but also due to the slot machines themselves. According to Statista, the slots in the USA are becoming increasingly popular. Around 50 percent of the gaming community in the states gambled on slot machines. In the long run, this enormous influx would automatically result in frequent tax reports.

Economy benefits?

The main argument of Titus and Reschenthaler is based on the economy, which would benefit enormously through the higher tax allowance. The slot machines would become even more attractive due to the reduced tax burden, which, in conversely, involves a higher influx of players. Casinos, arcades and gaming operators would automatically take more moneywhat ultimately ended up in the state sack through tax levies. Meanwhile, the manufacturers and operators of the slot machines also benefited from a higher tax allowance. So would Countless jobs in the gambling industry secured will.

The CGC does not fight for the adaptation of the tax upper limit for slot gains alone. The “American Gaming Association” (AGA) would also have switched on in the matter and Support the legal project. Bill Miller, President of the US gambling supervision, had recently praised the CGC’s push and assured his support.

Preliminary work necessary. Until there is an actual increase in the tax-free allowance for slot machines in the USA, there would have to be some legal changes in advance. In the first step, it is necessary to put on your own and autonomous law that clearly formulates the tax relief. In the next step, the draft must be approved by the US Congress.

Tax regulation for gambling in USA

In contrast to the United States, USA achieved profits by gambling significantly more player -friendly. According to the applicable sales tax law (UStG) All gambling profits achieved tax -free. These include income from casinos, arcades, online casinos and also lotteries. The amount of the respective profit does not matter in the legal interpretation.

However, some requirements must be met so that tax exemption is actually granted. So the profit in a state must European Union have been achieved. Money that is introduced from abroad and is more than 10,000 $ must be against it Registered at customs will. In the online segment, profits that have been achieved with providers without EU license can also be confiscated.

Professional player. In USA, profits from gambling activities can be taxed under the premise that it is a regular and also the only source of income. Accordingly, if a certain amount that was achieved by the gambling, ends in your own account, you can be called a professional player. This regulation usually comes into force in professional poker players. As a rule, the income tax is then raised to any profits.