A change to tax rules surrounding gambling in the US could spell trouble for both professional and casual gamblers, following a new amendment change from Senate passes Donald Trump’s ‘One Big Beautiful Bill‘.
The President has passed a key procedural hurdle after a long night of haggling with Republicans, setting the stage for a floor vote in the House of Representatives on Thursday morning – but the effects could reverberate into the gambling industry.
Essentially, the change in tax rules to the tax rules for gambling could make it much harder to ultimately turn a profit. The deductions to gambling winnings will (under the Senate’s version of the bill) be limited to 90 percent of losses. This means that $100,000 in winnings against $100,000 in losses will be treated for tax purposes as if the losses were only $90,000.
Therefore, the more someone gambles, the harder it will be to turn a profit. The total losses that offset the winnings will always be reduced by 10 percent. In simple terms, it could make it much harder to be a professional gambler.
Professional gambler warns wide-spread effects on gambling industry in US
Professional poker player Phil Galfond, who plays on BetRiversPoker, took to social media to break down the current situation, claiming that you could pay more in tax than you won and that it could also hurt casual gamblers as well. “This is really bad,” he began.
“If you’re a professional gambler or recreational – but especially professional – and even if you are an operator in this area it is quite scary. The senate amended the big beautiful bill to include a small part about gambling tax. It says: ‘The amount you can deduct from your winnings shall be equal to the amount of losses during a taxable year‘.
“You could pay more tax than you made during the year and that is completely untenable – you can’t be a professional gambler in the US if this goes through. That will have a ripple effect on industries that depend on professionals – the Poker industry, the DFS do.
“A handful of states offer online regulated poker, if this happens, people will go gamble with offshore operators that are unregulated. The US will not see those tax dollars, the players will be, in many cases, less protected and they will not have the same level of anti money laundering security, responsible gaming, security that stop you becoming a problem gambler. This will impact all the players and the industries.
Potential win for gambling companies
While the players will be effected at all levels, the professional gamblers would be hit the hardest as it will impact their entire profit margin and would likely result in them gambling elsewhere, perhaps with unregulated markets offshore as predicted by Galfond.
On the other hand, those tax laws that will drive them away from the business of gambling is good for the purveyors of gambling, given it will reduce the herd of those who are more likely to win, leaving them with casual gamblers more likely to lose.
Whether or not the bill officially passes remains to be seen, but if it does, it will likely scare off those who are smart enough to consistently best the bookmakers by winning more than they lose.
In terms of the recreationally gambler, it remains to be seen how it would affect a market that has been predicted to become the biggest market in the world, valued at $54.8 billion from 2024-2029, according to a recent study.
