The law is creating backlash from the gambling industry and bettors who could owe taxes even if they break even.
As American taxpayers sift through the details of the nearly 900-page domestic policy law that President Trump signed this month, it has become clear that the nation’s gamblers are among the biggest losers.
A measure that Republican lawmakers tucked into the bill late in the legislative game altered the tax code in such a way that bettors who break even could still end up owing money to the Internal Revenue Service. The change created a new type of “phantom” income and has led to backlash from professional gamblers and within the gambling industry, which argues that the tax increase will hurt the hospitality sector in states like Nevada.
The outcries over the new gambling tax that was added to the Senate version of the law reflect the last-minute machinations that took place as Republicans raced to finalize the One Big Beautiful Bill and deliver it to Mr. Trump by July 4.
Gambling losses were traditionally fully deductible, so gamblers who broke even in a year would not owe any taxes. But under the new tax law losses are only 90 percent deductible, meaning that if a gambler won $100,000 and then lost $100,000, he could still owe tax on $10,000 of income.
To those who consider themselves professional gamblers, whether they bet on casino games like poker or sporting events, the change could alter the calculus over how much to bet and where.
“This new amendment to the One Big Beautiful Bill Act would end professional gambling in the US and hurt casual gamblers, too,” Phil Galfond, a professional poker player, wrote on social media. “You could pay more in tax than you won.”
