Gross for slots, net for keno
Reporting slots and bingo, the IRS measures the amount cancelled. The W-2G will show every dollar paid out, regardless of what the player wagered to win it. If a player risks 1,000 bucks in one pull, ups their stake to 5,000 bucks in the next, and wins 2,200 in the third, the IRS will get told that the final pull was a win at 2,200 dollars, while the two losers in between never happen. So we have a win, without those two burns, low enough in value not to need a W-2G. With keno, however, things are reckoned the other way. The player who clips that $2,200 on the same $2,200 outlay is spotting a win of $175, the 2,200 paid not having covered the $1,000, the 2,500, and the 5,000 bet in between. The pair of wins here, one slot and one keno win at 2,200, therefore get treated very differently, though to the outside world they look the same. The IRS gets told about the slot: the 2,200 slot win covered no albatross bets of its own, which is how it made it above threshold. But the $175 keno won, though the same $2,200 outlay, made it below threshold, though the LEDs only show the grown-up 2,200. The two-notch rise is not the only reporting advance to take effect in 2026; the threshold will move with consumer prices.
No withholding, unless you withhold your own number
These are information reporting thresholds only. Regular gambling withholding does not apply to winnings from bingo, keno or slot machines. But if the player does not provide their taxpayer identification number — which is usually a Social Security number — the casino must then take the 24% withholding tax out of the proceeds before actually playing them over to the player. The player will only get 76% paid out. The rule is:
A win two people share, and what the form never means
Where two or more people share the winnings, for example by sharing one winning ticket, the person who collects fills in Form 5754. The IRS rarely sees this form. Where two people share a win, for example when two friends play together and get just one ticket, only one person may collect the cheque. That person records on a Form 5754 the taxpayer identification number of each named participant. The IRS will never see this form: unlike a W-2G, it never leaves the casino. The Form 5754 collector pays, then prepares a separate W-2G for each winner, figuring how much of the win is taxable under each Social Security number. The payer then prepares a separate Form W-2G for each winner, showing the winnings taxable to that person. Where there is no taxpayer identification number for a participant, 24% backup withholding is applied to that participant's fractured share, like it would be for the cheque itself. If you have a W-2G from the casino, however, your gambling proceeds are taxable under your taxpayer identification number: the threshold is only the figure a W-2G requires, not the point up to which your gambling winnings are not flagged, deductible or taxable at all.
