Senate's 'One Big Beautiful Bill' Betting Tax Alarms, but Help May Be Coming
The US Senate's newly approved tax legislation in its version of the 'One Big Beautiful Bill' has sparked concern among bettors and industry professionals. It contains a provision that would automatically introduce tax losses on bettors, but Nevada Rep. Dina Titus promises to intervene.
LISTEN TO THIS ARTICLE:The provision, embedded in the nearly 900-page tax bill backed by Senate Republicans, would restrict the deduction of betting losses to 90% of winnings. Under existing tax law, individuals can deduct their betting losses in full, up to the amount of their winnings, to calculate net taxable income. The proposed change would reduce that allowance and potentially result in tax liabilities for bettors even in years when they break even or finish at a loss.
Related: Amended Sports Betting Tax Bill Approved in LouisianaBettors, including both professionals and amateurs, have voiced strong opposition to the measure. The 10% reduction in deductible losses is viewed by many as a de facto penalty on betting activity.
Tax professionals have reported growing concern among clients involved in betting, citing the financial pressure the change would impose. While the change won't impact all bettors, there's a chance that many would automatically face annual losses on their activity.
The proposed tax hike has gained widespread attention among those in the gaming community, particularly through social media platforms where professional bettors have raised awareness and urged lawmakers to revise the language. The measure, if implemented, would take effect next year and directly impact the financial calculations of those who report betting income on their tax returns. The Joint Committee on Taxation estimates the change will increase federal revenue by $1.1 billion over the next decade.
Rep. Titus has expressed concern about the potential effects on the gaming sector. She indicated that she is actively pursuing legislative adjustments to remove or revise the provision.
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Crunching the Numbers
According to Titus, the Senate may have underestimated the broad impact of the policy, believing it would only affect a small group of professional poker players. In reality, amateur and recreational bettors are also expected to feel the effects, and many have voiced their objections in recent days.
The House of Representatives is the next stop for the tax package following the Senate's passage on Tuesday. However, procedural hurdles remain, with House Republicans struggling to secure sufficient support to advance the bill.
The uncertainty over timing has complicated efforts to negotiate any changes or amendments before the bill reaches the House floor for a full vote. Rep. Titus continues to push for adjustments before the provision becomes law.
The proposed change comes at a time when legal betting in the US is seeing significant growth. Commercial gaming revenue reached nearly $72 billion in 2024, marking the fourth consecutive year of record-setting performance, according to data from the American Gaming Association.
The expansion of online sports betting platforms like FanDuel, DraftKings and Kalshi has played a key role in driving that growth. The Trump administration has also been linked to industry support efforts, with Donald Trump Jr. serving as a strategic adviser to Kalshi Inc., a platform offering event-based trading services.
While individual bettors may face higher tax burdens under the proposed changes, the gaming industry as a whole is positioned to benefit from other elements of the bill. Corporate tax extensions covering interest deductions, research and development costs, and full expensing are expected to provide relief to casino operators and betting operators.
These provisions are part of broader tax reforms included in the bill, which now awaits further action in the House.
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