Myths vs. Reality

The Issue of State Taxes and Slot Machine Handpays

Know Your Slots founder's $2,000 handpay at the D in April of 2018.
Written by Joshua

It’s not uncommon for a slot machine player to play at a casino outside their home state. That sometimes leads to confusion over the way taxes work, particularly at the state level.

This is one example of a question I’ve fielded recently:

When you hit a Jackpot from a state that has a state tax, why should I be forced to pay it when my state does not have a state tax?

The answer is pretty simple really – like many other laws that we have to obey when in a state physically, certain states make it part of the rules of engagement that you have to deal with when gambling in a state, by making it a requirement that you pay state tax on jackpot handpays.

So, when you have to pay a state in which you’re gambling at the time, it’s because that’s the rules with which a casino and a gambler has to abide by within when you’re in that state, not unlike how American citizens have to abide by US taxable handpay laws nationwide when we’re in the US, but not when we’re in Canada.

This will mean that you may have a more complicated tax filing journey because you have an additional state or more to contend with, depending on your situation. If this is something you wish to avoid, you may want to do a bit of homework around which casinos are in states that have these requirements, and play at ones that don’t, just to avoid the hassle.

The reality is filing an additional state usually isn’t a massive difference in cost and time effort, and the state tax is usually marginal (a few percent is what I’ve traditionally seen). That said, some people hate any money at all being pulled from their casino wins, given the casino losses that usually come with them, so they want to avoid those expenses at all costs.

If that’s you, a little extra homework can yield a bit less hassle in that department.

About the author

Joshua

My name is Joshua, and I’m a slot enthusiast who works in tech as a marketer by day, and dabbles in casinos periodically during off-times. Know Your Slots will reflect my interests in understanding the various ways you can play slots, travel, casino promotions and how you can get the most out of your casino visits.

1 Comment

  • I appreciate your write-up regarding Wynn’s slot program. I made the mistake of just downloading the chips a couple dozen times a day for the last 3 years without playing much at all because of not using the program since I was playing (and using) myVegas and its free buffet/room reward offers. Then – unfortunately! – the pandemic hit and now their – and seemingly Wynn’s – has turned into a glorified “coupon book” program instead. I recently started playing Wynn’s slots and wondered why my points are taking so long to add up and your article explained it all: these types of programs get diluted over time – and I think the pandemic put it on steroids. It now looks like free buffets aren’t even an option anymore (as with myVegas now) and the level (3) requirement just to book a free room is insanely high now thanks to the bet devaluation. I played a lot the last 2 days (at 318k to 4.78 million a spin and I only moved my level about 40 points to 274. I remember when I first played towards the beginning of the program is I could accumulate 700 to 800 points just for downloading. Not anymore.
    One good thing I now know, is I’m glad to see at least they aren’t charging a resort fee like myVegas does, but, like you said, you’re almost obligated to buy the $99 coin package (at least once) just to be able to book a room! It took me 3 years and many many hours of downloading to get to 7.5 billion coins- and now I don’t think that will even be enough to reach level 3 without a purchase. I guess time will only tell…

    Thanks for the info – and I will be reading some of your other material as well. 👍

    Good luck!
    Casey

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