Key IRS threshold updates, operational considerations, and planning steps for Tribal Gaming Operations
If you haven’t heard already there are changes coming for Tribal casinos in 2026 in relation to their tax reporting requirements that will have significant impact on their operations.
With its recent release of a draft copy of the Form W-2G, the IRS has indicated that there will be an increase in the reporting threshold from $1,200 to $2,000 beginning in the 2026 tax year, though the specific effective date has not yet been published. Beginning in the 2027 tax year, the threshold will be adjusted annually based on the Consumer Price Index (CPI).
Additionally, the instructions for the draft Form W-2G included instructions related to filing for sports wagering winnings, with the threshold of winnings (minus the wager) of $2,000. This is subject to the 300-to-1 rule, whereby the reporting is not required if the winnings are not more than 300 times the amount wagered. The tax withholding requirements on sports wagering winnings continues to be at a threshold of $5,000, subject to the 300-to-1 rule (with the withholding rate at 24%).
Legislation passed during 2025 will also increase the reporting threshold for forms 1099-MISC and 1099-NEC to $2,000 from the current threshold of $600, beginning in the 2026 tax year.
Since these are significant changes, there will be several considerations in implementing into your operations including:
- Discussions with your IT personnel and gaming vendors on a plan for updating your slot machines to the new threshold for both 2026 and in future years when the threshold is adjusted for CPI.
- Updating policies and procedures for slots, sportsbook, cage, and other areas as necessary to implement for the new reporting thresholds.
- Educating and training the casino floor and cage managers/supervisors and other key personnel on the new reporting thresholds and how that impacts their day-to-day procedures.
- Considerations for obtaining information for T31 reporting versus tax reporting on jackpots, qualifying sports wagering winnings, drawings, and other prize giveaways.