One Big Beautiful Bill: Betting Industry Alarm

New Betting law Sparks Controversy: What it Means For Gamblers In 2026

A New law impacting how gamblers can deduct losses is set to take effect on January 1, 2026, stirring debate within the betting community. The “One Big Beautiful Bill Act,” recently passed by the United States House Of representatives and awaiting President Donald Trump’s signature, contains provisions that could significantly alter the tax landscape for both professional and recreational bettors.

The core of the controversy lies in a change to the internal Revenue Code. Currently, bettors can deduct 100% of their losses against their winnings. The new law restricts this, allowing deductions of only 90% of losses against 100% of gains in any given year.

Key Changes To Wagering Deduction Losses

• Current Law: 100% of losses deductible against winnings.
• New Law (Effective 2026): Only 90% of losses deductible against winnings.

This seemingly small change could have significant financial implications, notably for those who engage in high-volume betting.

The Impact On Bettors: A Closer Look

The amended law could lead to scenarios where bettors face unexpected tax liabilities. Consider this: a bettor wins $100,000 but also loses $100,000. Under the current law, their taxable income would be zero. However,the new law would only allow them to deduct $90,000 in losses,resulting in a taxable income of $10,000,even though they broke even.

Another scenario: A bettor wins $200,000 but loses $210,000. The new regulations would permit claiming only $189,000 in deductible losses, leading to a taxable income of $11,000, despite an overall loss.The bill explicitly caps deductions to the extent of the gains.

While recreational bettors may not feel the pinch as much, professional gamblers stand to be heavily affected.

Pro Tip: Keep meticulous records of all your betting activities,wins,and losses. This will be crucial for accurate tax reporting under the new law.

Professional Gamblers Sound The Alarm

Phil Galfond, a prominent poker player, voiced his concerns on X, stating that the change could make it unsustainable to be a professional gambler in the U.S. He also suggested it might push players towards offshore betting platforms.

“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 said. “This will impact all the players.”

Nevada Congresswoman Dina Titus echoed these concerns, highlighting the potential for driving individuals to unregulated black markets.

“It pushes people into the black market if they don’t do regulated gaming because they have a tax disadvantage,” Titus stated on News Nation. “The black market doesn’t pay taxes, isn’t regulated, doesn’t help with problem gaming, so it’s bad for the industry, as well as for the player.” Titus indicated her intention to introduce legislation to reverse these changes.

Scenario	Winnings	Losses	Deductible Losses (New Law)	Taxable Income (New Law)
Breakeven	$100,000	$100,000	$90,000	$10,000
Net Loss	$200,000	$210,000	$189,000	$11,000
Profit	$1,100,000	$1,000,000	$900,000	$200,000

Do you think this new law will deter professional gamblers from operating in the US? what other potential consequences might arise?

Gaming Industry’s Outlook

The American Gaming Association (AGA) has offered a contrasting viewpoint, praising the bill’s passage. They believe the “one Big Beautiful Bill Act” will bolster the industry’s ability to maintain jobs and contribute to economic growth.

“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.” However, they also mentioned plans to collaborate with Congress to address the wagering deduction losses.

Did You know? The IRS has increased scrutiny on gambling income in recent years. Staying compliant is essential to avoid penalties.

Gambling Tax: A past Overview

Tax laws related to gambling income have evolved significantly over the decades. Initially, gambling winnings were often considered gifts and not subject to taxation. However, as gambling became more prevalent and regulated, tax laws adapted to treat winnings as taxable income.

Key milestones in gambling tax history include the introduction of Form W2-G, which requires casinos and other gambling establishments to report winnings that meet certain thresholds to the IRS. This form helps ensure that individuals accurately report their gambling income.

Strategies For Managing Gambling Taxes

Navigating gambling taxes can be complex, but here are some strategies to help manage your tax obligations effectively:

• Keep Detailed records: Maintain a comprehensive record of all your gambling activities, including dates, locations, amounts won, and amounts lost. The IRS requires specific documentation to substantiate deductions.
• Offset Losses: You can deduct gambling losses up to the amount of your winnings. Ensure that your losses are properly documented to support your deductions.
• Seek Professional Advice: Consider consulting a tax professional who specializes in gambling income. They can provide tailored advice based on your specific circumstances.

Frequently asked Questions About The New Betting Law

• Question: What Is The New Betting Law About?
  Answer: The New Betting Law, included in the ‘One Big Beautiful Bill Act,’ changes how gamblers can deduct losses against their winnings. Starting January 1, 2026, bettors can only deduct 90% of their losses.
• Question: How Does The New Betting Law Affect My Taxes?
  Answer: The New Betting Law could increase your taxable income, even if you break even or lose money overall. You’ll only be able to deduct 90% of your losses against your winnings.
• Question: Who Will Be Most Affected by This Betting Law Change?
  answer: Professional gamblers, including sports bettors and poker players, are likely to be the most impacted. Recreational bettors may not notice a significant change.
• Question: Why is The New Betting Law Controversial?
  Answer: Critics argue that the new law creates a tax disadvantage for gamblers, potentially driving them to unregulated, offshore betting operations.
• Question: What is The American Gaming Association’s Stance On The Betting Law?
  Answer: The American Gaming Association praised the passage of the bill, stating it supports consumers, encourages business innovation, and strengthens U.S. competitiveness.
• Question: Is There A Chance The New Betting Law Could Be Repealed?
  Answer: congresswoman Dina Titus has expressed interest in introducing a new bill to roll back the changes, showing there’s potential for future legislative action.

What are your thoughts on this new betting law? Share your opinions and concerns in the comments below!

here’s a PAA (People Also ask) related question for the provided article title and content:

One Big Beautiful Bill: A Turning Point for the Betting Industry

The “One Big Beautiful bill,” a working title referring to pending or proposed legislation, represents a meaningful shift in the landscape of the betting industry. This article delves into the potential impacts of this bill, analyzing its implications on various stakeholders, including betting operators, consumers, and the overall market dynamics. Keywords like “betting regulations,” “industry changes,” and “financial implications” are central to understanding the shift.

Key Provisions and Potential Impacts

The specific details of “One Big Beautiful Bill” are subject to change, but its key focuses often encompass regulatory overhauls, tax implications, and consumer protections. Understanding these provisions is crucial for industry participants. Let’s analyze the most common areas of focus within new betting legislation.

Regulation and Compliance

New legislation often strengthens regulatory frameworks. this frequently involves enhanced licensing requirements, stricter monitoring of financial transactions to prevent money laundering (AML) and counter-terrorism financing (CTF), and expanded oversight of advertising practices. The goal is to establish standards and reduce the likelihood of abuse, and increase the legality of the market. This includes establishing regulatory bodies.

• Enhanced Licensing: More stringent criteria for obtaining and maintaining betting licenses.
• AML and CTF Measures: Implementation of robust systems to detect and prevent financial crimes.
• Advertising Standards: Tighter controls on advertising content to protect vulnerable audiences.

Financial Implications on Betting Operators

This is also a key concern for several operators. The implementation of “One Big Beautiful Bill” has deep financial implications for betting operators, including new taxes and fees, and this can involve changes in corporate taxes. These added costs can affect the profitability of some operators and may pressure the competitive landscape, potentially leading to consolidations or restructing within the industry.

Here is how the bill can shift the landscape and the effect on operators.

Impact Area	Potential Effect	Key Considerations
Increased Taxes	Higher tax rates on betting revenue.	Impact on profit margins, adjustments to pricing models.
Compliance Costs	Expenditures on regulatory compliance.	Investment in new technologies, staffing, auditing.
Market Access	Changes in licensing/market access.	Ability to operate in new markets.

Consumer Protections and Responsible gambling

Legislations are typically designed for the consumer, along with responsible gambling. This may include deposit limits, and a number of tools. Increased consumer protections are at the forefront with this legislation. The bill emphasizes harm minimization through various methods.

• Deposit Limits and Spending Controls: Setting maximums on deposits and wagers.
• Self-Exclusion Programs: Tools for players to opt out of betting services.
• Responsible Gambling Campaigns: Public awareness campaigns promoting safe betting habits.

Industry Reactions and Adaptations

The betting industry’s reaction to the “One Big Beautiful Bill” varies depending on the specifics and their respective areas. Some operators advocate for clear and fair regulations, for safer environments, while others voice concerns over increased costs and administrative burdens. Adaptations include:

• Investment in Compliance: Allocating resources to ensure adherence to new regulations.
• Product innovation: Focusing on safer forms of betting like fantasy sports options.
• Market Diversification: Exploring new markets, to reduce risk from legislation.

Preparing for the Future

The “One Big Beautiful Bill” is expected to create a long-term impact. Betting businesses must quickly adapt with market volatility. Preparing for these changes requires a proactive stance:

• Stay Informed: Continuously monitor regulatory developments.
• Risk Assessment: Evaluate and update risk management strategies.
• adaptability: Prepare for swift and effective change,based on any new regulations.