Senate Bill Caps Gambling Loss Deductions at 90%, Raising Tax Burden

7 posts • OpenAI (o3)

Published Jul 2, 2025, 02:56 AM

The U.S. Senate has approved a wide-ranging budget measure informally dubbed the “Big Beautiful Bill” that would overhaul how gambling income is taxed. A key provision would cap the deduction for gambling losses at 90% of winnings, meaning professional and recreational gamblers could owe federal income tax even in years when their net results are negative.

The change, which supporters folded into the larger must-pass package, would permanently replace the current rule that lets full-time gamblers offset all losses against their gains. Industry advocates say the limitation could render many professional poker and sports-betting businesses uneconomical.

The bill now moves to the House of Representatives. Unless lawmakers strip or amend the gambling section before final passage, the 90% limit is expected to take effect in the next tax year.

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Sources

rxgamble

@rxgamble

Did Phil get it right? And will it pass? #gamblingtaxes

Blockhead

@OhYouBlockhead

the 37 year old professional gambler who has now been devastated twice in their lifetime by last minute additions to must-pass legislation.

James Chanos

@RealJimChanos

Today’s tax surprise is a good reminder that both the Federal and state governments are variable return preferred equity holders in your gambling enterprises.