While most Americans were focused on the broader impacts of President Trump’s “big, beautiful bill,” a provision tucked inside could dramatically change how gambling winnings are taxed starting in 2026.
The new rules cap gambling loss deductions at 90% of winnings, a change that the Joint Committee on Taxation estimates could raise $1 billion in new revenue.
Previously, you could deduct all your losses against your winnings. This seemingly small change could leave some bettors paying taxes even when they’ve broken even or lost money overall.
The math that could cost you
Say you win $25,000 over a year but also lose the same amount. Under the new rules, you’d only be able to deduct $22,500 in losses, leaving you with $2,500 in taxable income despite breaking even.
But starting in 2026, only 90% of your losses could be deducted, meaning you’d still owe taxes on $2,500 in “income” despite breaking even overall.
Garrett Watson, policy director at the Tax Foundation, explained to Axios that under the new structure, “folks could have a tax liability that matches or exceeds the amount that they earn.”
Professional gamblers sound the alarm
For poker pros and other professional gamblers who rely on volume and small edges, this change poses an existential threat.
Pro poker player Phil Galfond warned on X that the provision “would end professional gambling in the US and hurt casual gamblers,” noting that pros could lose millions based on their wins and losses.
Yet professionals aren’t the only ones at risk. The explosion of sports betting apps like FanDuel and DraftKings means millions of casual bettors could face unexpected tax bills.
The tax change is fueling what Brett Abarbanel of UNLV’s International Gaming Institute described as widespread “rage,” with gamblers expressing mounting frustration across social media.
Weekend bettors caught in the crossfire
The frustration stems from how fundamentally this law alters the tax landscape for millions of Americans. That casual Sunday NFL bet suddenly carries heavier consequences when you realize it could affect your tax bill, even if you lose money overall.
According to Axios, Alexander Korsager, chief gaming officer at Casino.org, observed that online reactions reveal just how serious the concern is for many gamblers.
The timing hits particularly hard as commercial gaming revenue reached over $70 billion in 2024, according to the American Gaming Association.
Congress moves to reverse course
In response to growing frustration, Rep. Dina Titus (D-Nev.) introduced the FAIR Bet Act, Axios reports. The bill would restore full deductions for gambling losses.
She’s gained bipartisan backing from lawmakers including Reps. Ro Khanna (D-Calif.) and Troy Nehls (R-Texas), who argue the current rule unfairly penalizes everyday bettors.
Major players in the gaming industry are also supporting the repeal. DraftKings told Axios it’s working with lawmakers to restore fair tax treatment for users.
The American Gaming Association echoed that stance, saying it would help restore the long-standing approach to gambling losses.
Some Senate Republicans, Axios notes, didn’t fully register the provision’s impact during negotiations. Sen. Thom Tillis (R-N.C.) reportedly called it “bad policy” and said his focus was elsewhere.
Protecting yourself before 2026
While there’s hope Congress may roll back the rule, it may be wise for gamblers to prepare now. That includes tracking wins and losses in detail, especially if you itemize deductions.
According to Axios, Brett Abarbanel of UNLV’s International Gaming Institute warned that more backlash may follow once taxpayers see the impact on their tax returns.
If you tend to break even or lose overall, it might be time to reassess your gambling habits before 2026. Otherwise, you could owe taxes on winnings that never felt like real income.
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