It’s been almost 50 years since the jackpot handpay threshold was set at $1,200. In the intervening years, casino gambling has expanded across the country; when the threshold was set Atlantic City didn’t even have its first casino yet.
Every couple of years we hear proposals coming from Congress to update the threshold, but things don’t change. Players ask us a lot about these reports, as well as when things will ever change.
This year, things have the potential to look a bit different. That’s because the IRS Advisory Council recommended raising the threshold to $5,800, even higher than the most recent proposed legislation, which would increase it to $5,000.
What makes things a bit different this time is that it’s possible the IRS may be able to update the rule through regulatory action instead of legislation – in fact, the council noted that’s how the original threshold was set.
With the council advising the change, the IRS may be able to make the change itself, not requiring legislation that despite many attempts has not been able to get passed in Congress.
This leads to some optimism that this may be different this time, but players shouldn’t get too excited yet. Until a regulatory action or legislation does update the threshold, things won’t be changing. And even when it is updated, casinos are going to need time to update systems and slots to reflect this change.
The council also proposed the number be indexed to inflation, meaning the threshold will grow annually over time. This also could may make sense, once casinos are set up in a way that they can keep pace with this change relatively easily.
Traditionally we’d be a bit pessimistic, given the lack of ability for Congress to pass an increase in the past. But with a new avenue for potentially updating this number, this may be the time things work a bit differently.
