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High-stakes pay tables ease IRS red tape

Mar 11, 2003 5:33 AM

One of the joys of playing high-stakes video poker machines is the obvious chance at hitting a big jackpot, especially when playing Triple Play or Five Play video poker.

But there’s also the drawback that many "mid level" jackpots trigger the signing of a W-2G IRS statement for winning hands that don’t usually require one (jackpots of $1,200 or more require the issuance of a W-2G).

For instance, when playing draw poker for $5 credits, a four-of-a-kind paying 250 credits means a win of $1,250. It also means the machine locks up and a visit from the floor person with a W-2G for signing.

"It can be an annoyance," said one high roller who often plays $5 video poker machines. "It blows your rhythm every time you have to stop and get a hand-pay and sign the paperwork for Uncle Sam."

To keep players in the "rhythm" of their gambling sessions, IGT has come out with machines that feature pay tables that address these concerns.

"The pay tables have been adjusted so you don’t have to sign every time you hit a four-of a-kind or other mid-range jackpot," said the slot manager at a locals casino in Las Vegas.

To do that, the four of a kind payoffs of 50 credits per coin (250 coins with five coins), are reduced to 40 credits per coin, or 200 coins for five coins bet.

This results in quads being worth $1,000, easily under the IRS limit.

To keep machines pay back percentages up, the pay offs for hands such as full houses, flushes and straights are increased by one coin.

IGT has also adjusted the pay tables on the popular Game King series. To keep payoffs from the IRS threshold, the four-of-a-kind payoffs are lowered from 250 coins to 239.

In cash terms, this means a payoff of $1,195 instead of $1,250, thus positioning the new pay table below the IRS limit.