President Donald Trump’s budget reconciliation has one big consequence for career gamers as a new rule on tax deductions threatens to “kill professional gambling.”
Heading into the Independence Day weekend, the president celebrated both the nation’s birthday and the passage of his One Big Beautiful Bill Act. While provisions like no tax on tips were celebrated, professionals from the gaming industry were left fuming over a change to the tax code set to leave many on the hook for “phantom” wages.
According to the text of the legislation signed into law Friday, “For purposes of losses from wagering transactions, the amount allowed as a deduction for any taxable year … shall be equal to 90 percent of the amount of such losses during such taxable year, and … shall be allowed only to the extent of the gains from such transactions during such taxable year.”
Previously, the law allowed for the deduction of all losses. Now, were a gambler to break even with losses and wins at $100,000, they would be required to pay taxes on $10,000 of what professional poker player Phil Galfond called, “‘phantom’ income.”
Yikes.
Senate Amendment to the Big Beautiful Bill =
You get taxed on more than you earned from gambling, even if you netted $0 (or less!).Here’s how it works and what you can do…
The change
If it passes in this form, starting in 2026, gambling losses (and expenses) will…
— Phil Galfond (@PhilGalfond) July 1, 2025
“I’ve spoken to many clients and they’re very concerned,” accountant Zachary Zimbile told Bloomberg. “If you add a 10% penalty, it’s going to eat into a lot of their profit.”
As the American Gaming Association (AGA) marked four consecutive years of record revenue with $72 billion in 2024, bill scorers estimated the deduction rule will add $1.1 billion in collected taxes through 2034 by limiting deductions.
Addressing Texas Rep. Chip Roy (R), professional poker player Doug Polk posted to X prior to the bill’s passage, “Chip, I am in your district. There is a provision in the Senate version that will kill professional gambling. This will negatively impact THOUSANDS of Texans. Please look at this and help remove this senseless provision.”
Chip, I am in your district.
There is a provision in the Senate version that will kill professional gambling. This will negatively impact THOUSANDS of Texans. Please look at this and help remove this senseless provision. pic.twitter.com/NRf8a4hWaG
— Doug Polk (Code Doug) (@DougPolkVids) July 1, 2025
He went on to assert, “If you care about poker now is the time to get this out to every single corner of the internet. This has been snuck into the bill, and if it passes, tens of thousands of people will instantly lose their careers.”
Among those voicing frustration, Nevada Rep. Dina Titus (D), whose district includes parts of Las Vegas, spoke out against the bill by stating, “It will have a big impact on gaming. They thought it was just a handful of professional poker players, but a lot of amateurs have come out of the woodwork to oppose it too.”
She vowed to introduce a Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act Monday “to permanently restore the 100% loss deduction from gambling winnings.”
On Monday I’m introducing the FAIR BET Act, the Fair Accounting for Income Realized from Betting Earnings Taxation Act, to permanently restore the 100% loss deduction from gambling winnings.
I welcome all other members to join this common sense fix.
— Dina Titus (@repdinatitus) July 5, 2025
Meanwhile, the American Gaming Association appeared on board with the legislation as a released statement expressed, “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 US competitiveness.”
The passage of the One Big Beautiful Bill Act significantly enhances our industry’s ability to sustain quality jobs and deliver economic benefits — and we look forward to President Trump’s expected signature. pic.twitter.com/gEvfABL665
— American Gaming Association (@AmericanGaming) July 3, 2025
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Native of Brooklyn, NY, Kevin Haggerty is a graduate of Hunter College where he studied Cultural Anthropology and Geography. An avid reader and truth seeker, he currently resides in Texas with his wife and their dog and, when he isn’t researching current events and their impacts, you’ll find him spending time with friends and family or working on his next novel.
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