Professional gamblers may have cool lingo and get to wear sunglasses inside, but they’re just trying to earn a living like the rest of us. In fact, they’re taxed like any other profession.
But that’s changing, thanks to a largely unknown provision in the recently passed mega tax law.
What’s different: Bettors are currently able to deduct 100% of their gambling losses, so they only pay taxes on their winnings. But starting next year, only 90% of gambling losses will be deductible.
So, if a professional gambler wins $100,000, then loses $100,000 that same year, according to the New York Times:
- In 2025, that gambler would owe taxes on $0.
- In 2026, that gambler would owe taxes on $10,000.
Bettors could even end up paying taxes if they finished the year with a net loss.
Bettors ask for a reshuffle
Unsurprisingly, professional gamblers want to royally flush the provision, which is being described in terms usually reserved for inside straight draws. “It makes it impossible to gamble for a living,” pro poker player Phil Galfond told the NYT.
Nevada-based accountant Russell Fox told the Washington Post, “This is bad long-term for the casino industry. It’s bad for gamblers. It’s actually bad for the IRS, too. We need a less-complex tax system.”
And if casino dealers and accountants may feel the pinch, surely it will make waves in the green-visor industry.
So, how did this happen? Nobody seems to know. President Trump’s tax bill was 900 pages long, and some high-profile Republican lawmakers were surprised to learn of the gambling provision’s existence. It’s possible a congressional staffer added it—without their boss knowing—to meet a requirement that “tax legislation passed through reconciliation, as this bill was, must have an effect on revenue,” according to the Washington Post.
Up next: The House introduced bipartisan legislation last week to overturn the provision. But that’s not the only reverse card being played—household staple Uno is reportedly becoming a Las Vegas table game.—BC