#pokertax

As President Donald Trump prepares to sign his sweeping “One Big Beautiful Bill Act” into law, an unexpected group is raising red flags: gamblers.

Tucked deep inside the nearly 900-page legislative package is a controversial tax provision that has set off alarm bells across both professional and casual betting circles. Starting in 2026, gamblers will be allowed to deduct only 90% of their gambling losses—a significant shift from the current rule that allows deductions up to the full amount of winnings.

Why Gamblers Are Furious

Under the current tax code, gamblers who win big but also lose big can offset their income by deducting their losses, preventing taxation on net-negative years. But under Trump’s new bill, even bettors who lose money overall could find themselves owing taxes on money they never actually profited.

Professional poker player Phil Galfond summed it up bluntly on X (formerly Twitter):

“This new amendment to the One Big Beautiful Bill Act would end professional gambling in the US and hurt casual gamblers, too. You could pay more in tax than you won.”

He even posted a video explaining the issue, urging gamblers to immediately contact their congressional representatives.

A Taxing Example: Paying the IRS on a Losing Year

Here’s a real-world scenario gamblers are worried about:

A gambler wins $200,000 over the year but loses $210,000.

Under current tax law, they deduct all $210,000 in losses and owe nothing.

Under the new rule, they could only deduct 90% of losses, or $189,000.

That would leave them with $11,000 in taxable income—despite actually losing $10,000.

Galfond added that for professionals, this could be devastating:

“A pro who earns $200K/year might have $3M in winnings and $2.8M in losses. This means earning $200K and being taxed as if they earned $480K. This applies to both recreational and professional gamblers.”

Industry Reaction: “Disappointed” and Scrambling

The American Gaming Association (AGA), which represents the U.S. gambling industry, expressed clear frustration. In a letter to Congress, AGA President Bill Miller called preserving the current deduction structure “critical” for the industry’s survival. The AGA warned that limiting deductions would undermine a fast-growing legal market that brought in a record $72 billion in commercial gaming revenue in 2024.

AGA’s other tax priorities include:

Raising the slot jackpot reporting threshold from $1,200 to $5,000.

Repealing the sports betting excise tax.

Opposing taxes on tips and supporting the current corporate tax rate.

“We’re disappointed,” said one gaming industry source. “We’ll be monitoring the impact and seeking to work with congressional leaders to fix this before the overall legislation takes effect at the end of this year.”

Political Pushback and Possible Fixes

Rep. Dina Titus (D-Nevada), who represents Las Vegas, has already stepped in to oppose the provision. She tweeted:

“Buried within the BS Republican Budget bill is a provision that harms poker players and those who gamble by limiting loss deductions. I’m working on a legislative fix that fairly treats gaming losses in the tax code.”

But time is short: Trump is set to sign the bill into law on Friday.

Wider Implications for the Gambling Boom

Since the 2018 Supreme Court ruling that dismantled Nevada’s monopoly on sports betting, the gambling industry has seen explosive growth. Today, 38 states, Washington D.C., and Puerto Rico have legalized some form of sports betting. Apps like FanDuel and DraftKings have made betting more accessible—and more addictive.

But alongside this boom, researchers are documenting increased financial distress among bettors, particularly young men. Internet searches for gambling addiction and calls to helplines have surged. Now, this new tax measure may serve as a harsh wake-up call, making the financial downside even worse.

Even Nate Silver, the prominent political analyst and poker enthusiast, weighed in:

“Tax code is already punitive to poker players… Senate-passed version of OBBBA would make it considerably worse.”

Conclusion: A Risky Bet for U.S. Gamblers

Trump’s “Big, Beautiful Bill” may score political points for its size and ambition, but it’s leaving a sour taste in the mouths of American gamblers. Whether you’re a pro earning millions or a weekend player betting on your favorite team, this new rule could drastically change your odds—not at the tables, but with the IRS.