A sweeping tax and spending bill could significantly impact professional and high-volume sports bettors. President Donald Trump signed it into law on July 4 as part of the "One Big Beautiful Bill Act" (OBBB).
The legislation limits how much bettors may deduct of gambling-related losses and expenses, capping them at 90% of gross winnings.
Key takeaways
- The new bill imposes a limit on gambling loss tax deductions, capping them at 90% of gross wins.
- Nevada Rep. Dina Titus (D) announced an initiative to roll back the deduction limit.
- Professional gamblers voiced concerns over the new measure.
Previously, bettors could deduct gambling losses dollar-for-dollar against winnings, ensuring they only paid taxes on net profits. Under the new rule, even legitimate business expenses fall under the same 90% ceiling.
This is a shift from the former situation, where professional gamblers could separately itemize operational costs beyond loss deductions.
Critics argue this revision introduces a punitive framework. The House-passed version of the bill proposed a 100% cap on total deductions, including business expenses. However, the Senate's final version reduced this to 90%, merging losses and expenses into a single, more restrictive limit.
Nevada Rep introduces FAIR BET Act to counter OBBB
In response to the changes, Rep. Dina Titus of Nevada announced a new legislative initiative aimed at rolling back the 90% deduction cap. The proposed FAIR BET Act (Fair Accounting for Income Realized from Betting Earnings Taxation) seeks to reinstate the full gambling loss deductibility against winnings, aligning tax liabilities more closely with actual profits.
Rep. Titus said the measure is a pragmatic correction to safeguard fair tax treatment for those earning income through wagering. She called on fellow lawmakers to support the bill.
The FAIR BET Act complements earlier legislation Titus introduced, including the Discriminatory Gaming Tax Repeal Act and the SLOT Act. The latter proposes raising the outdated $1,200 slot machine tax reporting threshold to $5,000 and indexing it to inflation.
Pro gambler warns of career-ending impact from new law
Professional poker player Phil Galfond is among the most vocal critics of the new tax provision, warning it could devastate players who rely on slim profit margins. In a video posted on X, Galfond outlined how the change results in players being taxed on what he termed "phantom" earnings.
The Big Beautiful Bill is supposed to generate $1.1 billion in extra tax revenue from gamblers.
— Phil Galfond (@PhilGalfond) July 4, 2025
It won’t.
And, here’s how they could generate $100+ billion instead. pic.twitter.com/KS3V8bb8Nl
Using an example of $5.2 million in gross winnings and $5 million in expenses, Galfond explained that only $4.5 million of those expenses would be deductible. The remaining $700,000, although not actually profit, would be treated as taxable income.
For a gambler who actually earned $200,000, the tax would be based on $700,000, a discrepancy that could wipe out profits and lead to financial loss.
Galfond called the legislation a potential "end of many pro gamblers' careers," citing the precarious financial conditions many already face.
