Iowa gaming industry seeks change in how winnings are treated

$1,200 in winnings would no longer trigger search for state debts

A dealer shuffles the deck for a game of blackjack at Riverside Casino. (Liz Martin/The Gazette)
A dealer shuffles the deck for a game of blackjack at Riverside Casino. (Liz Martin/The Gazette)

DES MOINES — When gamblers win $1,200 or more at Iowa casinos, they are subject to a search for debts owed to state government — child support, for example.

State lawmakers are now considering a bill to strike that $1,200 threshold and bring the threshold in line with federal rules that could vary, depending on which game people are playing when they hit their jackpot.

House Study Bill 502, which was approved by a House State Government subcommittee Wednesday, provides that debtors be subject to a “setoff” if the winnings must be reported on Internal Revenue Service Form W-2G for gambling winnings.

The IRS requirements depend on the amount of winnings and the type of wager, according to Wes Ehrecke of the Iowa Gaming Association.

Federal guidelines for table games and sports wagering are different from the thresholds for poker and other games.

The association believes that casinos and racetracks regulated by the state have no legal standing to ask a sports wagering winner of $1,200 to show their Social Security number.

“It’s not a taxable-winning threshold,” according to the IRS, he said.

After lawmakers approved sports wagering last year, rules for the implementation of the law were written on an emergency basis.


The gaming industry asked the Administrative Rules Review Committee of the Legislature for what is called a “session delay” to give legislators an opportunity to discuss the issue this year. It was granted.

Lawmakers don’t expect the bill to be controversial.

However, in subcommittee, it was suggested that in addition to the state taking winnings to satisfy child support that is owed, local governments could place a claim on winning to satisfy municipal fines.

The proposal now goes to the full State Government Committee.

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