Trump’s budget bill will affect all aspects of the economy
The budget bill passed and signed the law touches on the lives of all Americans in one way or another. Will you get better or worse?
- From 2026 onwards, tax laws will make enough changes to irritate people who dream big by betting online and buying lottery tickets heading to casinos.
- Instead of gambling losses being deducted across the full range of gambling prizes, the loss would be limited to 90%, said Tom Osaben of the National Association of Tax Professionals.
- Many gamblers do not itemize deductions and therefore do not receive tax cuts on losses. That remains under President Donald Trump’s “big, beautiful bill” new tax law.
Gamblers lost a small tax cut in the nearly 900-page mega-tax and spending bill that President Donald Trump signed into law on July 4th.
For example, if you win a $1,000 bet in the Super Bowl in 2025, you can claim a maximum of $1,000 in gambling loss by itemizing all your deductions when you file your federal income tax return next year. And in this example, that victory will not be taxed.
But the game ended when taxes on gambling changes ruled in 2026.
What are the tax rules regarding gambling?
It remains true. You can only claim gambling losses up to the amount of your prize money if you itemize all deductions. Most people have not recently won items because they get better tax deductions by taking the standard deduction.
The amount of loss that can be deducted is limited by the prize money. Deductible losses cannot exceed the total prize money for that year.
How new tax laws will change things for legal gamblers
Changed: From 2026, tax laws will change enough to bother many people who dream big by heading to casinos, betting online, or buying lottery tickets.
That means you can only deduct 90% of your losses in 2026 with a $1,000 victory and then you’ll be deducted. In this example it’s $900. The winner in this example will pay taxes on the $100 prize in 2026 when he filed his tax return for that year.
“Instead of deducting gambling losses to the full range of gambling prizes, they’ll be limited to 90%,” said Tom Osaben, a registered agent for tax content and government relations and director of government relations for the 23,000-member National Association of Tax Professionals.
Without a doubt, the new 90% limit will not affect the 2025 tax returns filed early next year. Applies only to prizes and losses made after 2026.
Mark Starber, chief tax information officer at Jackson Hewitt Tax Services, told the Detroit Free Press earlier this year. And that’s still true.
However, he said that anyone who considered a professional gambler and self-employed person is eligible to deduct travel and accommodation costs while working.
However, the new tax law makes it clear that costs associated with carrying around gambling activities such as travel, admission fees and accommodation related to professional gambling will be treated as a loss of gambling and are subject to a 90% cap.
As a result, from professional poker players to young gamblers, you can use the app to bet on soccer.
Some people already want to see the new tax rules changed
On July 7, US Rep. Dina Titus introduced legislation to restore 100% deductions for gamblers. The Nevada Democrats call her bill my fair betting law. This calls for a “fair accountant of income realized from taxation of wagers.”
“It gives a fair shaking to everyone, from recreational gamblers to high stakes gamblers,” Titus said in a statement.
“We should encourage players to properly report prizes and bets using legal operators. Changes to the Senate simply encourage people to not report prizes and use unregulated platforms.”
According to a group spokesman, the American Games Association praised the introduction of fairbet laws as the group hopes Congressional leaders and the Trump administration will restore long-standing tax treatment of game losses.
In the beginning of the spring, an industry group that includes members including Draft King, MGM Resorts International, Churchill Downs, Firekeeper Casino Hotel, Cherokee Nation Hotel and other big names should consider “not only maintaining itemized taxpayer deductions, but also getting Gross’ net to risked for spows for spose spose for intemings and spows for intemizers as an issue of fairness.”
“Under current policy,” a letter sent to Congressional leaders in May said, “most taxpayers do not identify items, and many games’ customers are subject to discrepancies in which they are unable to cover losses and are taxed on the full amount of total game victory.”
“As a result, those who are in a position to lose at the end of the year are effectively taxed on income they haven’t received,” the letter said.
Others have also spoken out on social media.
The Nevada-based tax returner posted what was featured on X. If the law remains at a 90% limit and comes into effect in 2026, it will hurt high stakes gamblers.
“But so is the average gambler who gets ‘good fortune’,” Russell Fox said.
“Vegas was built on a dream. If that dream was removed (or reduced significantly) by bad law, Vegas would be hurt.”
I think the same applies to casinos at other 1 million spots where many people choose to gamble legally.
Please contact Personal Finance Columnist Susan Tom Paul: stompor@freepress.com. Follow himr x @tompor.
