Federal Government Policy and Business

Play Slots, Pay Taxes: The IRS Wants a Piece of More Jackpots

Bloomberg Businessweek: Nothing kills the thrill of a big-money win at the casino quite like a tax form—and soon the grasp of the taxman could be felt before the jackpot celebration stops at a lucky slot machine.

By law, gamblers must pay taxes on every dollar they win at casinos, at racetracks, and even from informal bets on football games. Losses, of course, generate no tax liability. In practice, it's quite difficult for the Internal Revenue Service to keep tabs on exactly how well gamblers are doing. At slot machines, for instance, only jackpots of $1,200 or more must be reported to the IRS. A lucky player winning a big jackpot will find that the machine automatically shuts down until a casino employee arrives with tax forms.

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