Gambling Loss Tax Changes in the “Big Beautiful Bill”
by Blake Roberts,
July 16, 2025
According to the “Big Beautiful Bill”, starting from January 2026, gamblers can only deduct 90% of their gambling losses against their winnings.
How Does This Work?
The highly controversial “Big Beautiful Bill” is a major tax and spending package signed into law by President Trump earlier this month. One of its key provisions covers gambling losses and how they’re treated for federal tax purposes.
In 2026, gamblers will be able to deduct only 90% of their gambling losses up to the amount of their winnings, as opposed to the current 100% deduction rate. The following example will help you get a better picture of what the changes entail:
| Scenario | Winnings | Losses | Deduction Allowed | Taxable Amount |
|---|---|---|---|---|
| Old Rule | $100,000 | $100,000 | $100,000 | $0 |
| New Rule | $100,000 | $100,000 | $90,000 | $10,000 |
If you win $100,000 and lose $100,000 in the same year, under the current system, you won’t need to pay any taxes whatsoever. But according to the “Big Beautiful Bill”, in 2026, you’ll be able to deduct only $90,000. Essentially, you’ll owe taxes on the remaining $10,000.
Who’s Going to Be Affected?
The new taxation system will disproportionately affect professional gamblers and high-stakes players. They may need to pay significant amounts in taxes even if they make little or no gambling profits for the year. Occasional gamblers could also see higher tax bills, especially if their losses approach their winnings.
Opinions on the Gambling Tax Changes
The adjustment to the taxation of gambling losses has raised lots of controversy, with professional gamblers understandably opposed to the changes. Some of them have gone as far as saying that this will be the end of professional gambling as we know it.
“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. Contact your representative quickly.”
Phil Galfond, a professional poker player, wrote on X.
On July 10, 2025, Senator Cortez Masto was looking to get unanimous consent to fast-track her bill to repeal the gambling loss deduction cap included in the tax reform. However, Republican Senator Todd Young of Indiana objected and effectively stalled the process.
Democratic Representative Dina Titus from Nevada has already introduced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act. This is a direct response to the Big Beautiful Bill, which aims to permanently restore the 100% deduction of gambling losses against winnings.
Titus believes the changes could harm the legal industry and “push people to not report their winnings and to use unregulated platforms.” Overregulation in gambling worldwide has hardly had the desired effect, oftentimes leading to low channelling rates.
We’re yet to see how this will unfold, but we’ll keep you posted on any significant updates. Keep your eyes on this space if you want to stay ahead of the latest news about the gambling industry across the country.
by Blake Roberts
July 16, 2025