What is a Handpay Jackpot in Slots?

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handpay jackpot

Those of us who spend enough time around slots in United States casinos will eventually get to know a scenario that occurs when a win of at least $1,200 is achieved on a single wager on a slot machine. They are known as a handpay, or jackpot handpay, and exist primarily because of IRS rules around slot machines and other electronic games (such as dealerless table games).

IRS Handpay Jackpot Rules

Under rules that have existed in the U.S. since the 1970s, any wager on games like slot machines that yield a win of at least $1,200 must be reported to the IRS for tax purposes. When a player achieves this outcome, the casino will need to capture some basic reporting information, such as your social security number and usually a form of ID like a driver’s license.

Once they’ve entered everything into their system, they will come back out, hand you your paperwork, and count out the money into your hand – hence the term “handpay.”

For many slot players it’s a bucket list goal and a rite of passage in a casino, especially for those who don’t bet very high. That is because the $1,200 threshold is the same regardless of the size of the wager – whether you bet 50 cents or $50 for that particular bet, if you win $1,200 or more the win must be reported.

Fastpay as an Alternative

In response to this issue, some casinos are introducing a service that skips a lot of these steps  by collecting all a player’s handpays for the day into one tax document. Players where casinos offer this register at the cashier at the start of the day, and collect their paperwork at the end of the day. 

This has been helpful for higher limit players who breach the threshold regularly in a single casino visit, and reduces the work for everyone involved, while still completing the required reporting to the IRS.

There have been attempts by a few in Congress to recalibrate this number to reflect inflation since the number was set. If the $1,200 were adjusted based on how much that amount then would be worth today, the handpay number would be more than $5,000 in today’s terms. Despite efforts periodically in recent years, however, there has been no success in getting that amount changed. So for now, that’s still the rule.

So, if you ever find yourself winning a large amount of money, keep an eye on that credit count-up and if you roll over the $1,200 mark, it’s time to get excited because you’ve achieved a jackpot handpay!

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2 Replies to “What is a Handpay Jackpot in Slots?”

  • Mike Howard says:

    That’s why it’s also very handy to make sure you use your player’s cards. At tax time, you can offset your losses against your jackpots. Pretty much every casino with a player’s card keeps track of your play and you can print a handy dandy win/loss statement at the end of the year. For most of us, that means no taxes. Unfortunately, you can’t claim losses, so it just zeros out.

    • FlipTheSwitch.com says:

      Hey Mike! Thanks for your comment. However, a couple of things to clarify:

      • Win/Loss statements are certainly helpful, but as far as the IRS concerned in the event of an audit, they are not considered enough as proof – they require that you keep a diary if you are going to do this, along with other supporting proof like ATM receipts. They even state so on their website. This is because if you fail to put your card in, or if a machine’s card reader isn’t working, it’s not reliable enough on its own to confirm all of your play. In the case of table games the casino record keeping is more manual, and more prone to errors.
      • Players can offsets losses against their wins if they are able to itemize. With the heavy increase of the standard deduction a few years back, that has put itemizing out of reach for many.
      • Many players fail to follow IRS directions that they must list all wins as income (regardless of whether a W2G is generated or not) and then losses can be placed against the wins if you can itemize.

      Because the IRS can’t audit everyone, this is likely one reason holding back the taxable limit being raised – many players simply don’t follow the rules, and in the absence of being able to audit all these players, it’s easier just to take in some of the taxes from those who can’t itemize.

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