Is There Tax On Ohio Casino Slot Machine Jackpots

Introduction to Ohio Slot Machine Casino Gambling in 2020

Ohio slot machine casino gambling consists of eleven casinos. Four are stand-alone casinos with table games while seven casinos are pari-mutuel racinos with horse tracks and simulcast betting.

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Ohio casinos have a minimum theoretical payout limit. Return statistics are publicly available.

This post continues my weekly State-By-State Slot Machine Casino Gambling Series, an online resource dedicated to guiding slot machine casino gambler to success. Now in its third year, each weekly post reviews slots gambling in a single U.S. state, territory, or federal district.

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Relevant Legal Statutes on Gambling in Ohio*

  1. Yes, gambling income, which includes winnings from slots, table games, horse racing, sports betting, lottery games, jackpots, and the like, is considered taxable income. As such, you are required to report.
  2. Paco And The Popping Peppers.

The minimum legal gambling age in Ohio depends upon the gambling activity:

  • Land-Based Casinos: 21
  • Poker Rooms: 21
  • Bingo: 18
  • Lottery: 18
  • Pari-Mutuel Wagering: 18

In 1933, an approved constitutional amendment legalized pari-mutual wagering at racetracks. The 1970s saw the arrival of the lottery and charity bingo. Social poker games have always existed, but the house must not profit from the game.

The original operators of Ohio’s four stand-alone casinos backed a proposed constitutional amendment. In November 2009, 52% of voters approved the constitutional amendment allowing one casino in the cities of:

  • Cincinnati
  • Cleveland
  • Columbus
  • Toledo

In addition to the usual fees and taxes imposed on Ohio businesses, the constitutional amendment required or specified:

  • A 33% tax on gross casino revenue
  • Distribution of the proceeds of the tax
  • A license fee of $50 million per casino dedicated to workforce development
  • An initial capital investment of $250 million for the development of each casino facility
  • The existence of the Ohio Casino Control Commission
  • The Ohio General Assembly would pass other laws to facilitate the operation of the casino gaming amendment
    • A maximum of 5,000 slot machines at each casino facility
    • There is no limit on the number of table games allowed

Subsequent changes in state lottery legislation allowed pari-mutual racetracks to begin offer video lottery terminal (VLT) style slot machines in 2012. These were the first racinos in Ohio.

*The purpose of this section is to inform the public of state gambling laws and how the laws might apply to various forms of gaming. It is not legal advice.

Slot Machine Private Ownership in Ohio

It is legal to own a slot machine privately in the state of Ohio without restriction as to its date of manufacture.

Gaming Control Board in Ohio

In 2009, a constitutional amendment created the Ohio Casino Control Commission. Its website is comprehensive but only applies to slot machine casino gambling at Ohio’s four stand-alone casinos.

In 1973, a constitutional amendment established the Ohio Lottery Commission. The Ohio Lottery eventually became responsible for and controls video slot machines found at Ohio’s seven racinos. These pari-mutuel racetracks began adding VLT-style slot machines starting in 2012.

The state gaming commission offers significant resources for slots enthusiasts besides return statistics. For instance, enforcement provides quarterly and fiscal year gaming crimes and statistics including offenses by statute.

Casinos in Ohio

There are four commercial casino resorts and seven commercial pari-mutuel racetracks with simulcast betting as well as slot machines in Ohio.

The largest casino in Ohio is Eldorado Gaming Scioto Downs with 2,386 gaming machines in February 2020.

The second-largest casino is MGM Northfield Park with 2,183 gaming machines in February 2020.

Commercial Casinos in Ohio

The four casino resorts in Ohio are:

  1. Hard Rock Casino Cincinnati found in downtown Cincinnati located 106 miles southwest of Columbus along the Ohio River near the borders of Kentucky and Indiana.
  2. Hollywood Casino Columbus in Ohio’s capital of Columbus.
  3. Hollywood Casino Toledo found 140 miles north of Columbus near the border to Michigan.
  4. JACK Cleveland Casino found 144 miles northeast of Columbus near Lake Erie in downtown Cleveland.

The seven pari-mutual racetracks with VLT-style slot machines in Ohio are:

  1. Belterra Park found 10 miles southeast of downtown Cincinnati on the Ohio River.
  2. Eldorado Gaming Scioto Downs found 11 miles south of downtown Columbus.
  3. Hollywood Gaming Dayton Raceway found 59 miles north of Cincinnati.
  4. Hollywood Gaming Mahoning Valley Race Course in Youngstown found 68 miles southeast of Cleveland.
  5. JACK Thistledown Racino in North Randall found 16 miles southeast of Cleveland.
  6. MGM Northfield Park found 18 miles southeast of Cleveland.
  7. Miami Valley Gaming in Lebanon found 30 miles north of Cincinnati.

Tribal Casinos in Ohio

Ohio has no tribal casinos as no federally-recognized American Indian tribes exist in this state.

Other Gambling Establishments

As an alternative to enjoying Ohio slot machine casino gambling, consider exploring casino options in a nearby state. Bordering Ohio is:

  • North: Michigan Slots and Lake Erie
  • East: Pennsylvania Slots
  • Southeast: West Virginia Slots
  • South: Kentucky Slots
  • West: Indiana Slots

Each of the links above will take you to my blog for that neighboring U.S. state to Ohio.

Our Ohio Slots Facebook Group

Are you interested in sharing and learning with other slots enthusiasts in Ohio? If so, join our new Ohio slots community on Facebook. All you’ll need is a Facebook profile to join this closed Facebook Group freely.

There, you’ll be able to privately share your slots experiences as well as chat with players about slots gambling in Ohio. Join us!

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Payout Returns in Ohio

Ohio’s Gaming Control Act section 3772.20 states that the minimum theoretical payout is 85% for slot machines at Ohio’s casino resorts. This same payout limit applies to slot machines at Ohio’s racetracks with slot machines thanks to the Ohio Lottery’s Video Lottery Game Rules.

Ohio’s five stand-alone casino resorts have return statistics publicly available from the Ohio Gaming Commission. However, Ohio’s seven racetracks with slot machines have their return statistics available from the Ohio Lottery. Both sources offer return statistics by:

  • Month
  • Casino
  • State-wide

In February 2020, Monthly Casino Revenue Reports from the Ohio Gaming Commission shows return statistics for the four casino resorts were:

  • State-Wide: 91.82%
  • Hard Rock Cincinnati: 92.03%
  • Hollywood Columbus: 92.06%
  • Hollywood Toledo: 90.97%
  • JACK Cleveland: 92.29%

The highest return for casino resorts went to JACK Cleveland at 92.3% while the lowest went to Hollywood Toledo at 91.0%.

In February 2020, VLT Fiscal Revenue Reports from the Ohio Lottery shows return statistics for the seven racinos were:

  • State-Wide: 90.79%
  • Belterra Park: 90.90%
  • Eldorado Gaming Scioto Downs: 90.48%
  • Hollywood Gaming Dayton Raceway: 90.71%
  • Hollywood Gaming Mahoning Valley Race Course: 90.20%
  • JACK Thistledown Racino: 90.64%
  • MGM Northfield Park: 90.97%
  • Miami Valley Gaming: 91.31%

The highest return for racinos went to Miami Valley Gaming at 91.3% while the lowest went to Hollywood Mahoning Valley at 90.2%. Overall, JACK Cleveland had the best return of any casino or racino in Ohio while Hollywood Mahoning Valley had the lowest.

Summary of Ohio Slot Machine Casino Gambling in 2020

Ohio slot machine casino gambling consists of eleven casinos operating under two gaming commissions. These casinos include four stand-alone casino resorts regulated by the Ohio Gaming Commission and seven racinos with pari-mutuel wagering and video-lottery-terminal (VLT) style slot machines regulated and controlled by the Ohio Lottery.

The minimum theoretical payout limit at all Ohio casinos is 85%. Each gaming control board offers monthly return statistics which are publicly available.

Annual Progress in Ohio Slot Machine Casino Gambling

In the last year, JACK Cincinnati has officially switched ownership to Hard Rock Cincinnati. Further, in Cincinnati over the last year, Boyd Gaming operates Belterra Park after this racino’s purchase in late 2018.

Related Articles from Professor Slots

Other State-By-State Articles from Professor Slots

  • Previous: Northern Mariana Islands Slot Machine Casino Gambling
  • Next: Oklahoma Slot Machine Casino Gambling

Have fun, be safe, and make good choices!
By Jon H. Friedl, Jr. Ph.D., President
Jon Friedl, LLC

Introduction to Taxable Jackpots

One of the most popular slot machine questions on Google searches is: How do slot machines pay out taxable jackpots? I’ve assumed this question is about the mechanics of the payout process. A different upcoming post deals with explaining when slot machines pay out.

Slot machines are special-purpose computers, like a lot of equipment found in our lives. Specifically, standard tools are televisions, electronic watches, gas station pumps, cash registers, bank ATMs, automobiles, baby monitors, and the list goes on and on.

Each of these devices has one or more computer microprocessors, visual display, audio speaker, and some may also have a way to accept and/or dispense money either physically or virtually online.

Beyond controlling the multiple interfaces to and from the player, the computer within a slot machine also manages the odds of a player winning.

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At its core, a pseudo-random number generator (PRNG) is a calculation. This PRNG is an element of the computer programming algorithm used by slot machines.

PRNGs (or more commonly RNGs) determine the outcome of a player’s bet based on the pre-determined odds of winning as set by the casino operator within the limited options provided by the slot machine manufacturer.

As previously mentioned elsewhere, winning a jackpot involves using the PRNG twice:

  1. To determine if a jackpot is won
  2. To determine how much was won

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The Slot Machine Gambling Process

Once a player selects a specific slot machine, that machine operates to accept or reject the inserted cash, ticket voucher, and reward card.

Next, it accepts the player’s selection for denomination amount and amount of credits to be bet, although it will merely reject one or both settings if insufficient funds are available to make such a bet.

When the bet is placed, the machine immediately selects the latest random number generated by its RNG to determine the outcome of the bet and well as updating the players club card with the points earned for placing the bet.

At the end of this process, the machine turns the reels to show the outcome of the bet. See below for this player-machine sequence of events.

During slot machine gambling, a sequence of actions and reactions take place between the player and machine. The player:

  • selects a specific machine, inserts money in the form of cash or ticket voucher
  • chooses from the denominations available
  • chooses the number of credits to bet
  • places a bet
  • observes the results of the bet including any bonus round
  • receives winnings from the bet (if any)
  • then, either:
    • leaves the machine empty handed
    • cashes out any remaining funds and leaves with a ticket voucher
    • continues playing the machine.

The player may choose to insert a player card at any time before or during play, then later remove it before leaving the machine.

Jackpot!

Between determining the outcome of the bet and turning the reels, the machine executes programming code that sets the reels.

The reels turn in a way the machine’s game designers consider most entertaining to the player – such as stopping on reel symbols for non-wins which are next to the symbols for sizable jackpots.

As mentioned, the bet’s outcome is determined when the bet is placed, not when the reels stop moving, despite the entertainment value derived by the player when observing the “action” of the slot machine.

In the event of a win, the machine executes further programming to activate sequences of lights and sounds while updating the information display for the player, which is referred to as a roll-up.

Now What? – The Jackpot Pay Out Process

If a jackpot less than the taxable limit is won, slot players can simply proceed with continuing to play or cash out from that slot machine. The current taxable jackpot limit is $1,200 in the United States.

Meaning, if you have a win of $1,200.00 or more at a slot machine, there is an immediate tax bill resulting in an IRS Form W-2G. If you have a win of $1,199.99 or less, there is no immediate tax bill.

Jackpots that require immediate payment of taxes results in the slot machine locking up.

Many, many slot players have been surprised by their slot machine locking up when a taxable jackpot is won. It can only be unlocked by a casino employee, a slot attendant.

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Whether a casino is old or new, a slot attendant will arrive shortly to administer a hand payout. During a hand payout, a slot attendant

  • collects personal identification sufficient to both complete a tax form as well as any other state-required documentation
  • performs the hand payout (if they have adequate cash on hand)
  • unlocks the machine to allow the player to continue.

If the attendant is not carrying enough cash with them, or if the player wishes to have a cashier’s check instead of a cash payout, the slot attendant leaves the player with a receipt and returns a short while later with the check or cash.

If the attendant leaves, they typically unlock the slot machine beforehand to allow the player to continue betting while waiting for the slot attendant to return.

Summary of Taxable Jackpots

The most important thing to remember about winning a jackpot is to make sure you’ve brought your government-issued I.D. If you don’t have it, then you cannot receive a taxable jackpot.

And, no, your friend sitting next to you cannot claim the jackpot for you – the eye in the sky knows it’s your winnings and not someone else.

The second thing to be aware of is what is or is not a taxable jackpot, a single win of $1,200 or higher. Many people have never won a taxable jackpot, so it can be challenging to get useful information on this unless you’ve done it more than a few times. But I have.

If the machine locks up, it’s either had an error or you’ve won a taxable jackpot. Being out of paper is a machine error, for example. Either way, a slot attendant will show up shortly to help. For goodness sake, don’t walk away until you know which!

As a final note, as of this writing, a decade ago, casinos moved away from using coins. Nowadays, they use cash, checks, and vouchers redeemable at cash machines and cages.

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Have fun, be safe, and make good choices!
By Jon H. Friedl, Jr. Ph.D., President
Jon Friedl, LLC