When you hit a jackpot on a slot machine or a video poker machine that's worth $1,200 or more, you get what's called a hand-pay. That means the machine you are playing on freezes up, and you have to wait for an attendant to bring you your winnings.
That's because any wins that reach that threshold must be reported to the IRS by cruise line (or land-based) casinos. House Chief Deputy Whip Guy Reschenthaler (R-Pennsylvania) and Rep. Dina Titus (D-Nevada), co-chairs of the bipartisan Congressional Gaming Caucus, have been working since early 2024 to modernize this policy.
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"Under current policy, slot machine jackpot winnings of $1,200 or more require a W-2G tax form," they said in a letter to the IRS. "This threshold has not been updated since 1977, despite a substantial increase in the number of W-2G forms filed each year.
"Due to inflation, this outdated standard has significantly increased compliance burdens on taxpayers and operating costs for casinos across the country."
They are calling for an increase to $5,000 and periodic increases in line with inflation.
Though IRS officials have made positive comments on the proposal, no action to make the change has been taken.
Because of that relatively low tax threshold, many casino players end up with multiple W-2G forms each year. That means they pay taxes on the winnings at their full income tax rate.
Losses can be offset from those winnings, however, to lower your tax liability. Royal Caribbean recently emailed its Casino Royale players to alert them to a change that will make getting those records much easier.
Royal Caribbean and Celebrity add new technology
Earlier this year, Royal Caribbean and Celebrity Cruises made the hand-pay process easier. Now, passengers on some ships have the option to register their identification with the cruise line before they win a hand pay.
If they do this, their wins are recorded and the proper IRS forms are created without the players having to wait for an attendant. Passengers love this because getting the attention of the attendant needed for a hand pay can be difficult.
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In land-based casinos, some of which offer the same service, not having other players seeing you getting paid out also increases safety. That's less of a concern on cruise ships where cameras are everywhere and passengers do not have to go outside after a big win.
Now, Royal Caribbean has added another new service for Casino Royale players that will make things easier for them come tax time.
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Royal Caribbean automates win/loss statements
Update: Celebrity Cruises added the new automated win/loss statements on Dec. 19, the day after its sister cruise line.
Technically, all casino winnings are taxable, and all losses can be deducted from any winnings. Most players, however, do not report small wins to the IRS, nor do they track their losses to offset the winnings.
Casinos, however, do track players' wins and losses as long as they are logged in to its loyalty program while playing. By law, those casinos need to offer year-end win/loss statements to players, and some casinos make that easier than others.
Royal Caribbean's Club Royale casino program sent an email to registered players on Dec. 18 with the subject line: Important Update: A new way to access your win/loss statements from Club Royale.
The email shared the following news:
"We are excited to introduce the newest Club Royale feature — access to your Win/Loss statements from the last 5 years," the cruise casino wrote. "You can now self-service and download your Win/Loss statements from 2020 to 2023. Additionally, starting on January 31, 2025, you’ll be able to download your Win/Loss statement for 2024."
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Casino Royale did share a caveat:
"Please note that this is not an official tax form. To download your Win/Loss statements, you must log into your Guest Account and agree to our terms & conditions when prompted. For a Win/Loss statement to generate, you must have previously gamed onboard with your SeaPass card."
A formal statement for the IRS can still be requested on the cruise line's casino website.
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