Ask the Slot Expert: Are gamblers tipping less?

A recent Question of the Day on the Las Vegas Advisor website was whether they thought if No Tax on Tips would cause people to tip less. After all, a tax-free $x tip is now worth as much as a taxed $x+y tip.

I never heard anyone justify why a tipped employee making $x per year in wages and tips should pay less in taxes than a salaried or hourly employee making the exact same amount without tips. I suspect it's the same reason why tax cuts for corporations and the wealthy are permanent, while tax cuts for the 99% expire after a few years.

The impact of No Tax on Tips came up when I was talking with a friend who works on the slot floor. We didn't discuss how he thought the policy might affect tipping. He said that tipping is already down from what it was a few years ago. His casino periodically distributes the tip pool (maybe once it reaches a certain amount). He said that the tip distribution is happening much less frequently now.

He said that casinos are nickel-and-diming guests and he felt that is affecting tips. After the parking fees, the mandatory resort fees, the high prices at the restaurants, and the $2 surcharge on a coffee from the Starbucks in the lobby, guests have little left to give as a tip.

If the wage information he told me was accurate, the lower-level employees on the slot floor already weren't paying much, if anything, in federal income tax. This policy isn't going to put much more money in their pockets.

People extolling the policy rarely mention this nuance. No Tax on Tips applies only to federal income tax. Tip income is still subject to the employee FICA (Social Security and Medicare) contribution, which is 7.65%. In addition, the policy is applied as a deduction when filing taxes. I wonder how many tipped employees went to HR after they got their paychecks and said that they thought there was supposed to be no tax on tips now. "Well...."

I started tipping less long before No Tax on Tips. First, I used to be able to play NSU at breakeven every day of the week. Now that most casinos have cut back on points for video poker players, my new baseline is a small loss. My advantage on point multiplier days is also less than it used to be.

Second, Las Vegas relaxed handpay requirements so a single attendant can pay most handpays instead of requiring two -- one to count the money and one to, I don't know, get my signature on the tax form. (How many slot attendants does it take to pay a jackpot?) Having only one attendant to tip automatically cut my tip in half.

Third, my yearly total is less because I enroll in Instant Jackpot, or whatever the casino calls it, when available. This lets me bypass the handpay and have my big win added right to my credit meter. The casino sends me a consolidated W-2G at the end of the year. No handpay, no one to tip.

And fourth, my Scottish heritage might have something to do with it. The English in me makes me wait in line and the Scottish -- Well, look up the reason why it's called Scotch tape.

If you would like to see more non-smoking areas on slot floors in Las Vegas, please sign my petition on change.org.

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