I have tried numerous times to get taxes withheld from a W2G payment, but only one club has ever agreed to do it (that was in Reno). They always check with casino finance and either say they can't do it, or it's too much trouble.

There is a big advantage to having taxes withheld if it's late in the year and you know you are going to owe significant taxes. All withholding on a W2 (including W2G) is treated by the IRS as if it had been paid evenly over the year. You can usually avoid penalty for underpayment this way if you can find a casino to accommodate you. That applies to taxes on ANY kind of income you received in the tax year.

As to increasing the dollar threshold for requiring a W2G, I'd like to see it happen, but with the government trying to be sure everyone pays taxes and many being philosophically opposed to gambling in general, I don't think the regulators will agree to a lower cutoff. We'll just have to wait for the devaluation when they cut a zero or two off the value of the dollar.