Those who play slot machines in casinos are in for some great news in 2026. A rule that has been a source of frustration for both the casino industry and players for years is finally going to change. If you enjoy trying your luck on slot machines, this article brings you a very important update.
If you win $1200 or more playing slot machines in a casino, you are required to pay taxes on it immediately. This rule has remained unchanged for the past 50 years, but now the Internal Revenue Service has announced a major change to it.
As per OBBBA, the amount for which immediate tax reporting is required has been increased from $1,200 to $2,000. The IRS itself has confirmed it, and it is all set to come into effect from January 1, 2026. It means you will only have to pay tax on your winnings if the amount is $2000 or more.
What rules were in effect until now?
Currently, the rule is that if someone wins $1200 or more from a slot machine in a casino, they must report these winnings to the Internal Revenue Service, for which an IRS Form W-2G is provided.
This rule was implemented in 1977, and at that time, this amount was considered quite substantial. However, no changes were made to it over time. Both casinos and players have repeatedly raised their voices for a change, and now, finally, their demand has been met and the amount has been increased.
What is going to change from 2026 onwards?
The IRS has publicly announced that, starting in 2026, the reporting threshold for winnings from slot machines in casinos will be raised to $2,000. This means that if someone wins less than $2,000, the casino will not be required to report it to the IRS.
One thing you should definitely note is that it’s not the case that no tax will be levied on the winnings; the same rules apply. Only the reporting threshold has been increased so that there’s no need to fulfill the reporting formalities for small winnings.
Why was this change necessary?
Regarding the reporting threshold for winnings from slot machines in casinos, players, casinos, and even members of parliament have repeatedly raised concerns that the current threshold does not reflect present economic realities.
Modern slot machines are now available in casinos, featuring bonuses, multi-line payouts, and digital systems that make winning $1,200 much easier. Since winnings must be reported immediately, repeatedly filling out tax forms is inconvenient for both the players and the casino.
How will the players benefit from this?
Increasing the reporting threshold for winnings from slot games in casinos has benefited players the most, as they will no longer need to fill out tax forms repeatedly, and the game won’t be interrupted, allowing them to play smoothly and win larger sums of money more easily.
As the threshold has been increased, fewer tax forms will need to be filled out, resulting in less paperwork, shorter waiting times, and more enjoyment. This is considered a positive change for regular slot machine players, and many players have openly welcomed this decision after the announcement of this change.
What will the IRS do next?
The Internal Revenue Service has openly indicated that more guidance and regulations regarding this change will be issued in the future. This could provide clearer guidelines for casinos, tax professionals, and players.
The 2025-2026 Internal Revenue Service Priority Guidance Plan includes formalizing new regulations under the sections 6041 and 6041A of the Internal Revenue Code; it indicates that the formal rules are still being developed.
Disclaimer: Information about the IRS raising the slot machine jackpot tax reporting limit to $2,000 in 2026 is for general awareness only. Official tax rules and reporting requirements are determined by the IRS.
