From mobile apps to physical plastic cards, almost every casino in the modern digital era offers some form of rewards or loyalty program that can be accessed or updated via mobile device, PC, or on-site kiosk.
And for that reason, the federal government is looking at these marketing tools to find more taxable winnings than what’s being claimed.
According to our sister site mGamingWatch. among a casino’s most powerful marketing tools are, undoubtedly, their rewards and comps programs. Such programs reward gamblers by their frequency of visits to the casino and frequency of gambling. This means that player comp cards provide an in-depth log of gambling activity for each casino.
Currently, if a player wins more than $1,200, a reporting process with the IRS is taken care of at the casino. However, this means that when a gambler generates multiple small wins throughout the year, that their profits may be able to go under the radar.
Since comp cards clearly report each gamblers annual winnings, Press of Atlantic City reports that the IRS would like to use the comp cards as a system to monitor if taxes are being paid properly. There are a multitude of reasons that the American Gambling Association opposes the IRS’s plan.
First and foremost rewards programs are designed as marketing initiatives, and this change stands to negatively impact the level of trust and respect between casinos and gamblers. Not only has that, there are concerns surrounding how the IRS will verify who a comp card belongs to. This proposal also opens the doors for a multitude of other methods of tracking nontraditional earnings.