Senate Tax Bill Puts Limits on Gambling Loss Deductions, Bringing in $1.1B Extra Revenue

The U.S. Senate just narrowly approved a controversial tax bill that could have huge implications for bettors of all types. The bill passed in a narrow 51-50 vote, heading back to the House for potential debate and amendments.  Notably, the bill included a suggested $1.1 billion tax increase on betting winnings, prompting backlash from bettors of all types, both professional and amateur.

Under the proposals, gamblers would only be able to deduct 90% of their losses against their winnings, instead of the current rule, which allows full deduction of losses. This means that a gambler will have to pay taxes on $10,000 of income from winnings, rather than $0, and enjoy a $90,000 tax loss. Professional players, who often deal with large sums, could be hit hardest. A pro with $5.2 million in wins and $5 million in losses, for example, could see their taxable income increase from $200,000 to $700,000.

“I've spoken to many clients and they're very concerned,” Zachary Zimbile, an accountant with experience in gambling regulations, said in an interview. “If you add a 10% penalty, it's going to eat into a lot of their profit.”

Representative Dina Titus, a Democrat representing Las Vegas, has voiced strong opposition, noting the far-reaching effects. “It will have a big impact on gaming,” Titus said. “They thought it was just a handful of professional poker players, but a lot of amateurs have come out of the woodwork to oppose it too.”

Experts warn that the proposed tax changes could unintentionally drive players toward offshore or illegal betting sites, threatening consumer protections and reducing state and federal tax revenue. In addition, the same bill includes language that would extend corporate tax breaks that are intended primarily to benefit large casinos and gaming businesses.

The gambling industry generated $71.9 billion in commercial gaming revenues in 2024, including gains from online wagering. As the House gears up to take its next steps on the bill, opponents are urging lawmakers to reconsider the idea entirely before it is enacted into law.