Rolling the dice just got a whole lot riskier under President Donald Trump’s One Big Beautiful Bill.
A few short lines in the 940-page bill could have an oversized impact on the gambling and sports betting industry. The bill, which was signed into law in July, goes into effect next year.
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Currently, gamblers only pay taxes on their profits. They can also deduct 100% of their losses against their winnings.
But under the new law, losing will cost you more; losses will be 90% deductible, meaning tax will be payable on the remaining 10%. So, even if you break even or lose money, you’ll still be taxed.
What the new law looks like in practice
For example, if you broke even playing poker by winning $100,000 and then losing all $100,000, you’d still owe taxes on 10% of those losses (meaning you’d be taxed on $10,000). Assuming a 24% federal tax rate, that would work out to a payment of $2,400 on money you didn’t take home. And when margins are even bigger, so is the taxable income, with larger winnings potentially pushing you into a higher tax bracket.
“This creates a tax on phantom income — forcing gamblers to pay federal income taxes on up to 10% of their winnings even if they end up losing all of it and more by year’s end,” according to senior policy analyst Michelle Minton in commentary for Reason Foundation.
While Rep. Jason Smith, R-Mo., told NBC News the provision was a “mistake,” the new law is expected to bring in $1.1 billion over the next decade, according to estimates by the Congressional Budget Office. Smith is the chair of the tax-writing House Ways and Means Committee.
But now Democrats and Republicans alike are looking to roll back the new rule.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
A double whammy for Las Vegas
While professional gamblers who risk large sums in high-stakes tournaments will feel this most acutely, the new rule will also affect recreational players.
Gambling winnings are “fully taxable,” according to the IRS, meaning you’re required to report those winnings as taxable income. That includes winnings from “lotteries, raffles, horse and dog races and casinos,” as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes.
“High Volume VIP play and professional play is the backbone of casino handle in sports betting liquidity,” said Adam Robinson of American Bettors’ Voice — an organization that represents domestic gamblers, during a town hall to address the new tax rule.
“If it’s no longer financially viable to bet recreationally or professionally, those players are going to take their action elsewhere,” he added. “That means fewer trips, fewer hotel nights, fewer restaurant visits, fewer tips, fewer jobs.”
Minton (of the aforementioned Reason Foundation) said that mid- and high-end poker tournaments “could face collapse as players weigh hefty buy-in fees and other costs against diminished returns.” That could also mean fewer events overall.
This could do serious damage to the state’s economy at a time when tourism is already taking a hit.
Nevada’s tourism industry generates nearly $100 billion in economic activity and supports 437,000 jobs, according to a 2025 report by the Nevada Resort Association.
But visitation to Las Vegas was down 11.3% in June compared to the same time last year, according to the Las Vegas Convention and Visitors Authority, “reflecting the broader backdrop of persistent economic uncertainty and weaker consumer confidence, compounded by a slower convention month.”
Tourism is also impacted by geopolitical factors, such as tariff wars and immigration policies, which are keeping some international visitors away. A report from the World Travel & Tourism Council suggests the U.S. is “on track to lose a staggering $12.5 billion in international visitor spending this year.”
What are lawmakers doing about it?
It seems this is one issue politicians on both sides can agree on.
Senators Ted Cruz (R-Texas) and Bill Hagerty (R-Tenn.), along with Nevada’s two Democratic Senators, Catherine Cortez Masto and Jacky Rosen, are trying to roll back the legislation with a new bill: the Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act.
This bipartisan bill is aimed at restoring the ability for gamblers to deduct 100% of gambling losses.
“Nobody is defending this as a sensible tax policy. I think it was a mistake that it was included, and I’m hopeful we’ll correct that mistake,” Cruz told NPR.
If it isn’t ‘corrected,’ however, it could be devastating to the gambling and sports betting industry.
Vacation gamblers might “shift from Las Vegas to Macau, or to European and Caribbean casino destinations, where their winnings are not automatically reported to the U.S. government,” said Minton.
“Many gamblers will also likely turn to offshore gaming websites, which also do not report gambling winnings to the IRS, some of which now accept bets in even harder-to-track cryptocurrencies,” she said.
While there’s hope the new rule might be rolled back before 2026, professional gamblers and recreational players alike may not want to bet on it.
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