Bill to tweak gambling win tax treatment advances

A legislative subcommittee advanced a bill Wednesday to modify how casinos address customer winnings.

When a gambler nets more than $1,200, Iowa’s casinos must scan state records to search for debts owed to state agencies, such as back taxes sought by the Iowa Department of Revenue.

A panel of the House State Government Committee—including Reps. Mike Sexton (R-Rockwell City), Jacob Bossman (R-Sioux City) and Dennis Cohoon (D-Burlington)—advanced House Study Bill 502, as first reported by Cedar Rapids Gazette reporter James Lynch:

The IRS requirements depend on the amount of winnings and the type of wager, according to Wes Ehrecke of the Iowa Gaming Association.

Federal guidelines for table games and sports wagering are different from the thresholds for poker and other games.

The association believes that casinos and racetracks regulated by the state have no legal standing to ask a sports wagering winner of $1,200 to show their Social Security number.

“It’s not a taxable-winning threshold,” according to the IRS, he said.

The change to the bill would align the trigger for a search to IRS guidelines for reporting such income, which depends on the type of wager—including sports betting, poker and slots.

After the Iowa Racing and Gaming Commission implemented “emergency” rules to implement sports betting after the Iowa legislature legalized the practice last session, casino industry representatives sought a session delay in the Administrative Rules Review Committee to allow the legislature an opportunity to modify guidelines this year.

Lawmakers could also add a mandate for casinos to track debts to municipalities, according to the Gazette report.

Below is the most recent version of HSB 502, according to the Iowa Legislature’s website.


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