On Thursday, the U.S. House of Representatives passed the One Big Beautiful Bill Act, which now heads to President Donald Trump's desk to be signed into law. The bill contains a change to betting law that is raising alarms within the betting community.
Within the Internal Revenue Code, the bill states that bettors will only be allowed to deduct 90% of their losses against 100% of their gains in any given year, a significant change to the current law that allows bettors to deduct 100% of losses against gains. The law would go into effect on January 1, 2026.
This could create some scenarios where bettors would be on the hook to pay taxes if they broke even or even net lost money on betting during the year. For example, a bettor who won $100,000 worth of wagers and lost $100,000 netted no money but would only be allowed to deduct $90,000 from their tax bill, meaning they would pay taxes on $10,000 of taxable income.
Further, a bettor who won $200,000 and lost $210,000 in a year would only be permitted to claim $189,000 in deductible losses, meaning they would have a taxable income of $11,000 even though they did not net profit on their wagers. The bill caps deductions to the extent of the gains.
While this may not affect the majority of recreational sports bettors, who largely lose money or make only nominal gains on the practice, professional gamblers, including sports bettors and poker players, could see their tax bill increase substantially. If a bettor were to win $1.1 million and lose $1 million in a year, for example, their taxable profit would increase from $100,000 to $200,000, a 100% increase from 2025 to 2026, assuming the same finances.
"You can't be a professional gambler in the U.S. if this goes through and that will have a ripple effect on industries that depend on professionals. I know you think a lot of industries don't depend on professionals but the poker industry does, the DFS industry does," pro poker player Phil Galfond said on a video posted to X. "This will impact all the players."
Galfond, one of the first pro bettors to raise the alarm, also mentions the possibility that this will push players in offshore sports betting operations. Congresswoman Dina Titus from Nevada's first district, which represents Las Vegas, expressed similar concerns.
"It pushes people into the black market if they don't do regulated gaming because they have a tax disadvantage," she said on an appearance on News Nation. "The black market doesn't pay taxes, isn't regulated, doesn't help with problem gaming, so it's bad for the industry, as well as for the player." Titus also showed interest in introducing a new bill to roll back the changes.
The American Gaming Association, the casino industry's lobbying body, praised the passage of the bill in a statement: "We commend congressional leaders on the passage of the One Big Beautiful Bill Act. Our industry's ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of OBBBA that support consumers, encourage business innovation and investment, and strengthen U.S. competitiveness. We look forward to President Trump's expected signing and will work closely with Congress in the coming months to address the changes to wagering deduction losses and further modernize the tax code."