A new tax rule tucked into President Donald Trump’s spending bill has gamblers worried—and it could ripple across some of the biggest names in the betting industry.
Professional gamblers are reportedly raising concerns over a new tax measure embedded within Trump’s sweeping new tax and spending law.
The legislation includes a provision that would significantly limit how gambling losses can be deducted starting in 2026, the New York Post reports.
According to the revised rules, only 90% of gambling losses will be deductible against winnings, a shift from the current policy that allows a full 100% offset.
The change is estimated to generate $1.1 billion in additional tax revenue.
The report notes that Zachary Zimbile, an accountant specializing in gaming taxes, said many clients have expressed deep concern over the revision. “If you add a 10% penalty, it’s going to eat into a lot of their profit,” Zimbile told the New York Post.
Professionals fear that the new framework could lead to income tax being assessed even in cases where a gambler breaks even—or ends up in the red.
Illustrative examples provided in the legislation suggest the implications could be significant.
A gambler who earns $100,000 in winnings and records an equivalent amount in losses would now face taxes on $10,000, New York Post adds. Similarly, someone with $500,000 in both winnings and losses—breaking even—would be taxed on $50,000. Even a net loss scenario, such as winning $200,000 but losing $210,000, could result in a tax bill on $11,000 in phantom income.
While professional gamblers will likely bear the brunt due to high transaction volumes, recreational bettors with frequent high-stakes activity might also find themselves affected in years with substantial swings.
The U.S. gambling market has boomed in recent years, thanks in part to digital platforms and state-level legalization.
The American Gaming Association reported that commercial gaming revenue in the U.S. hit nearly $72 billion in 2024—marking a fourth consecutive record-setting year, New York Post notes.
Platforms like Flutter Entertainment Plc (OTC:PDYPY), the parent of FanDuel, and DraftKings Inc. (NASDAQ:DKNG) have driven the surge in online wagering.
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