One Big Beautiful Bill Act: Impact on Poker

The U.S. House of Representatives has passed the One Big Beautiful Bill Act (OBBBA), which is now awaiting the signature of President Donald Trump to become law. 

Among its numerous provisions, the bill includes a revision to gambling tax deductions that has raised widespread concern across the professional poker and sports betting communities.

A key component of the OBBBA modifies the Internal Revenue Code by capping gambling loss deductions to 90% of a bettor’s annual winnings. 

The current framework allows bettors to offset 100% of their gambling losses against total gains within a given tax year.

This change, scheduled to take effect on January 1, 2026, would result in taxable income for gamblers who end the year breaking even or incurring overall losses.

For example: A bettor earning $100,000 in winnings and sustaining $100,000 in losses would previously have no taxable income. Under OBBBA, they could only deduct $90,000, resulting in $10,000 in taxable income.

A case where a bettor earns $200,000 in winnings and records $210,000 in losses would now result in only $189,000 in deductible losses, with a remaining $11,000 taxable despite an actual net loss.

Professional gamblers, including high-stakes poker players and full-time sports bettors, face potential increases in tax burdens even when their earnings remain the same. 

These players typically operate within narrow profit margins and rely on full deductibility to manage risk and maintain profitability.

Under current tax rules, a professional gambler with $1.1 million in winnings and $1 million in losses would report $100,000 in taxable income. Under the OBBBA, the same scenario results in $200,000 in taxable income, effectively doubling the individual’s tax liability.

The proposed changes have triggered immediate responses from figures within the poker and betting sectors. 

Poker professional Phil Galfond has publicly voiced his concern, suggesting that the tax adjustments may render professional gambling financially unviable within the United States.

“You can't be a professional gambler in the U.S. if this goes through and that will have a ripple effect on industries that depend on professionals,” Galfond stated in a video on X. 

He also warned of potential migration toward offshore betting sites and emphasized the broader implications for poker and Daily Fantasy Sports (DFS) operators.

Congresswoman Dina Titus, who represents Nevada’s first district including Las Vegas, raised similar issues during her appearance on News Nation. 

Titus highlighted the risk of increased activity in unregulated gambling spaces, stating, “It pushes people into the black market if they don't do regulated gaming because they have a tax disadvantage.”

Titus noted that a shift toward offshore or underground betting platforms could reduce tax revenue and potentially increase the prevalence of problem gambling. She also indicated that she may introduce legislation aimed at reversing the 90% deduction rule.

The American Gaming Association (AGA), which represents the interests of the U.S. casino industry, issued a statement in support of the OBBBA. While acknowledging potential concerns, the organization emphasized the economic advantages the bill may provide.

“We commend congressional leaders on the passage of the One Big Beautiful Bill Act,” the AGA stated. “Our industry's ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of OBBBA that support consumers, encourage business innovation and investment, and strengthen U.S. competitiveness.”

The AGA also noted that it plans to collaborate with lawmakers in addressing the specific issue of wagering deduction limits and will continue to advocate for modernization of the gambling-related tax code.

As the bill moves toward presidential approval and eventual implementation in 2026, the professional gambling community is facing increased uncertainty. Stakeholders are monitoring possible legislative countermeasures that could amend or reverse the reduction in loss deductibility. 

In the interim, professional poker players, sports bettors, and associated industries must assess the financial implications and consider how the new tax structure will influence future operations.