Professional gamblers say President Donald Trump’s “Big, Beautiful Bill” is a bad bet. Deep inside the fiscal measure adopted Thursday, July 3, is a provision that limits income-tax write-offs for gambling losses.
“Yikes,” professional poker player Phil Galford wrote on X. “Senate amendment to the Big Beautiful Bill=you get taxes on more than you earned from gambling, even if you netted $0 (or less!).”
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“Poker as we know it is under attack in America,” another player, Doug Polk, said on YouTube.
“If this bill passes, it will be a gigantic step backwards for the gambling industry,” Polk said. “And the majority of the people who play for a living today will not be able to do so moving forward.”
Taxing ‘phantom’ winnings
The gambling provision – six paragraphs in a 940-page bill – amounts to a $1.1 billion tax hike through 2034, Bloomberg reported.
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The “Big, Beautiful Bill” containing President Donald Trump’s spending priorities reduces the amount of gambling losses that are deductible for tax purposes. The change will amount to a $1.1 billion tax hike through 2034.
“It is really ugly (or, to use one of President Trump’s phrases, bigly ugly) toward gambling,” Russell Fox, a poker player and licensed tax professional from Las Vegas, wrote on his blog, Taxable Talk.
Under current tax law, professional and amateur gamblers alike may deduct 100% of their losses from their winnings to determine their tax liability from wagering. However, the Senate’s version of the budget bill limits those deductions to 90%. The amendment was one of numerous efforts to offset the $3.4 trillion the bill is projected to add to the federal deficit.
“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.”
Fox, the tax professional and poker player, says what might seem like a small change will have major tax implications for professional gamblers.
For example, he said, a gambler who won $100,000 in a year and lost an equal amount would be taxed on $10,000 in what he called “phantom” income.
The impact will be far greater on big-time gamblers, Galford said. He once won $1.6 million in a single day playing poker, according to Analyze Poker.
In a video posted to X, Galford said a gambler who won $5.2 million in a year and lost $5 million, for a net income of $200,000, would pay taxes on actual winnings plus 10% of the losses.
“You would make $200,000 during the year,” he said. However, “you would pay tax as if you made $700,000, meaning in almost everybody’s case you would pay more tax than you made during the year. Completely untenable. You can’t be a professional gambler in the U.S. if this goes through.”
$72 billion in bets
The change in tax policy comes amid a boom in legal gambling in the United States.
Americans placed a record-high $72 billion in bets in 2024, up 7.5% from the previous year, according to the American Gaming Association. The figure includes wagers on sporting events, bets at casinos and online gambling.
In a statement to Straight Arrow News, the association commended congressional leaders on passage of the bill and said the measure would enhance the gaming industry’s ability to deliver economic benefits. The statement, however, left open the possibility for amending the new rules on deducting gambling losses.
“We look forward to President Trump’s expected signing and will work closely with Congress in the coming months to address the changes to wagering deduction losses and further modernize the tax code,” an association spokesperson said.
Some industry analysts predict that heavy gamblers may shift toward illegal games where their winnings and losses are not tracked.
Gambling meccas, such as Las Vegas, are bracing for negative effects.
“It will have a big impact on gaming,” Rep. Dana Titus, D-Nev., told Bloomberg. “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.”
