New video poker machines lower taxes for winners

Tuesday, Sept. 19, 2000 | 10:32 a.m.

The Stratosphere hotel-casino announced the introduction of a series of high-limit video poker machines it says will significantly reduce federal taxes for winners.

The $5 "Duty Free" video poker machines were designed to reduce the number of taxable payoffs while increasing overall returns to players. The machines increase the payout on wins on four of a kinds in 2s, 3s and 4s while decreasing the payout for four of a kinds with 5s through kings. All jackpots above $1,200 must be reported to the Internal Revenue Service by the casino as taxable income.

If a player hits each four of a kind possible on a machine, winnings would increase by $950, while taxable jackpots would fall from $22,500 to $11,500, according to the Stratosphere. Company officials say they are particularly targeting local high-limit video poker players with the new machines.

"The very nature of high-denomination video poker is that the majority of payouts are $1,200 and above," said Stratosphere Vice President of Casino Operations Mike Turngren. "Our Duty Free video poker machines were made to shift the payout amounts slightly so that most of them are just under $1,200 and not taxable."