Stay informed with the
NEW Casino City Times newsletter!
LAS VEGAS, Nevada -- The Internal Revenue Service said Friday it will now require casinos and sponsors of poker tournaments to file paperwork when a player wins $5,000 or more.
Several Las Vegas casinos operators said they already handle business in the way the IRS is requiring.
Putting the rule into writing, however, ensures that all casinos, including riverboat and regional gambling halls, will report poker winnings uniformly.
"It streamlines the process so that everybody across the board does things in the same way," said Las Vegas Sands Corp. spokesman Ron Reese. "Everybody seemed to have a different threshold in place."
The IRS requirement takes effect March 4.
The American Gaming Association, the Washington, D.C.-based legislative arm of the casino industry, worked with the IRS on the reporting requirement. Wally Chalmers, vice president of government affairs for the gaming association, said the booming growth of poker nationally meant more casinos around the country were sponsoring tournaments.
"It was an effort to codify and give casinos guidance," Chalmers said. "It spells out what casinos need to do. There is no withholding of funds from customers."
The IRS said casinos meeting the reporting requirement won't need to withhold federal income tax at the end of a tournament. Poker tournament winners must provide their taxpayer identification number, usually a Social Security number, to the casino. If the winner fails to do so, the casino must withhold federal income tax at a rate of 28 percent.
If a casino does not report winnings, it is responsible for withholding the taxes and sending the money to the IRS. By law, poker tournament winners already must report poker earnings on their federal income tax returns.
Gaming Control Board member Mark Clayton said the requirement will force some casinos to start reporting poker tournament winnings. It wasn't that the casinos were not complying with the IRS, Clayton said, but the tax collection agency had never required the reports.
The IRS requirement won't change how Harrah's Entertainment handles payouts for the World Series of Poker. Money winners are required to file IRS paperwork before collecting their cut of the prize pool. The poker players are responsible for paying all federal taxes on their winnings.
The 2007 World Series of Poker, completed in July, had 55 events and attracted 54,288 registrants, the most in its history. The total prize pool was $159.8 million, funded by player entry fees. Harrah's takes a percentage of the entry fees. Harrah's took a 6 percent rake on the $10,000 buy-in world championship event, won Jerry Yang of Temecula, Calif., who collected $8.25 million.
World Series of Poker communications director Gary Thompson said the new requirement will benefit Harrah's, which operates smaller poker tournaments throughout its network of casinos. Before, Harrah's had poker players who won as much as $600 in a tournament file the IRS paperwork.
"It's going to cut down on paperwork and it will probably expedite payoffs," Thompson said.
Copyright GamingWire. All rights reserved.