From NBC News: A relatively underappreciated constituency is raising the alarm about President Donald Trump’s “big, beautiful bill” — gamblers.
Tucked into the nearly 900-page legislation is a change to how gambling losses are taxed that some professional and amateur bettors say could crush the industry.
The provision, only a few paragraphs, would limit what gamblers can deduct from their yearly taxes to 90% of their losses starting in 2026. Currently, bettors can deduct the entirety of their losses, up until their winnings.
Gamblers may owe taxes despite net losses due to a 90% tax deduction limit.
“This new amendment to the One Big Beautiful Bill Act would end professional gambling in the US and hurt casual gamblers, too,” said professional poker player Phil Galfond. “You could pay more in tax than you won. Contact your representative quickly.”
Trump is set to sign the bill into law on Friday. The provision first generated buzz online after the Senate passed the legislation on Tuesday.
One example given on X laid out that under this new setup, if a gambler won $200,000 in a year but lost $210,000, they would actually be able to deduct only $189,000 worth of losses. Meaning they’d have $11,000 in taxable income even though they netted $10,000 in losses during the year.
“A pro who earns $200k/year might have $3m in winnings and $2.8m in losses,” Galfond said in a subsequent tweet. “This means earning $200k and being taxed as if they earned $480k. This applies to both recreational and professional gamblers.”
If you have $100k in winnings and $100k in losses, you now owe tax on an additional $10k of income. Assuming a 24% tax rate, that is $2,400. However, if you have $1mm in winnings and $1mm in losses, you now owe tax on an additional $100k of income ($24k of additional tax).
— Zak Zimbile, CPA (@ZakTheCPA) July 3, 2025
