The one Good Change in the Gambling Tax Law

The One Big Beautiful Bill Act included one change that is genuinely beneficial for gamblers, and it is worth covering because it is frequently overlooked in the discussion of the 90 percent rule. Under previous law, casinos were required to issue Form W2G, the form that reports certain gambling winnings to both the player and the IRS- whenever a player won $1,200 or more on a single slot machine or bingo pull, $1,500 on keno, or $5,000 from poker tournaments. The $1,200 slot threshold had not been updated since 1977. Decades of inflation meant that what once represented a significant win now represented a fairly routine outcome, generating enormous volumes of W-2G forms that interrupted play, burdened casino operations, and created compliance headaches for players with no tax liability.

Starting with tax year 2026, the IRS has raised the reporting threshold for Form W-2G to $2,000 for slot machines, bingo, and keno, and indexed that threshold to inflation going forward. This means players will receive fewer W-2G forms, fewer play interruptions, and less paperwork for routine wins. The IRS confirmed in December 2025 that this higher threshold applies to W-2G forms starting January 1, 2026.

This is a genuine administrative improvement that the American Gaming Association had advocated for over many years. However, the gaming industry, affected players, and most tax professionals who have reviewed the overall package agree that the W-2G threshold increase does not come close to offsetting the financial harm created by the 90% loss deduction cap for active gamblers.