American Gaming Association President & CEO Geoff Freeman Testifies at IRS Hearing on Gaming Proposal

Opposes mandatory use of loyalty programs for tax purposes

Press Release | 06.17.2015

Washington, D.C. – Today, American Gaming Association’s (AGA) president and CEO Geoff Freeman testified at the Internal Revenue Service (IRS) hearing on the proposed rules regarding electronic player tracking regulations using player loyalty cards for tax reporting purposes.  

Read AGA’s IRS hearing testimony as prepared for delivery

The industry’s greatest concern, Freeman said, is that the proposal mandates electronic player tracking. This would pose significant challenges, since marketing tools are not equipped to serve this purpose and customers are uncomfortable with the proposed approach. Further, the mandate is inflexible and inconsistent with existing state requirements.

“While we recognize the IRS’ concerns and objectives, we question the need to impose mandatory, across-the-board use of the player-tracking tool for tax reporting purposes,” said Freeman. “Rather than mandating across-the-board use for tax reporting, we believe a more targeted approach is possible for achieving the IRS’ objective.”

Freeman detailed how a new voluntary electronic player tracking arrangement could be established for slot tax reporting if casinos were given sufficient lead time to develop systems and controls. Electronic tracking would also need to be an option for casinos, voluntary for customers and suitable for the IRS.

Freeman also made clear the industry’s opposition to the potential proposal to lower the slot jackpot reporting threshold could be cut in half, from the current $1,200 level to $600.

“The casino gaming industry strongly opposes any such reduction,” he said.

BACKGROUND

AGA filed comments on the proposal on June 1. In May, 17 members of Congress from eleven states sent a letter to   the IRS outlining their concerns with the proposal. States represented are Arizona, Colorado, Florida, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey and Ohio. Further, Nevada Senator Dean Heller wrote a letter to the IRS this month citing his strong concerns with the proposed regulation. Nevada Senator Harry Reid has also expressed his concerns to the IRS commissioner.

After the IRS announced the proposal on March 4, the AGA convened experts from member companies for regular meetings to assess each aspect of it, built consensus and formulated an effective response. AGA officials also met with the IRS in person to discuss the proposal in early May.

By the end of the public comment period on June 2, more than 13,000 people had expressed opposition to the proposal by signing a petition, leaving a comment directly with the IRS, or contacting their member of Congress by phone, on Twitter or on Facebook.

About AGA: The American Gaming Association is the premier national trade group representing the $240 billion U.S. casino industry, which supports 1.7 million jobs in 40 states. AGA members include commercial and tribal casino operators, suppliers and other entities affiliated with the gaming industry. It is the mission of the AGA to be the single most effective champion of the industry, relentlessly protecting against harmful and often misinformed public policies, and paving a path for growth, innovation and reinvestment. 

 

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