Trump's Tax Bill Threatens Professional Gambling Industry

Professional gamblers and sports bettors face an unprecedented crisis after Congress passed Trump’s massive tax legislation. The nearly 900-page bill contains a provision that could devastate the gambling industry by fundamentally changing how betting losses get taxed.

The new rule caps gambling loss deductions at 90% starting in 2026. Until now, bettors could deduct all their losses against their winnings, but this bill changes that completely. For players who rely on narrow profit margins, this change spells disaster. Many players now turn to Casino Apps for their betting needs, but even mobile platform users would face the same tax burden under the new regulations.

Under the new system, bettors who break even or lose money during a year would still owe taxes on phantom income. A gambler who wins $100,000 but loses the same amount would face taxes on $10,000 despite having zero profit. Professional players who wager millions annually while earning modest returns could see their tax bills exceed their actual winnings.

The mathematics paints a grim picture for serious players. A professional bettor with $3 million in winnings and $2.8 million in losses would earn $200,000 but pay taxes as if they made $480,000. This scenario could force many professionals out of the legal gambling market entirely.

Industry leaders scrambled to address the fallout after the provision surfaced just days before the Senate vote. The American Gaming Association had previously lobbied to maintain current deduction levels but remained silent as the bill advanced. Representatives for major operators (e.g., DraftKings and FanDuel) didn’t want to comment on these changes. 

This comes at the worst possible time for gambling, which has been booming since 2018. Thirty-eight states, plus Washington D.C. and Puerto Rico, now have legal sports betting, bringing in a record $72 billion last year. Professional gamblers play a big role in keeping these markets running smoothly.

Some industry observers predict the tax changes could drive players toward offshore platforms or alternative markets like prediction futures, which face different regulatory treatment. Event futures markets operate under investment rules rather than gambling regulations, allowing traditional loss deductions against other investments.

Nevada Representative Dina Titus has already announced plans to introduce corrective legislation. Tax specialists describe the past week as absolute chaos, with professional gamblers flooding accountants with panicked calls about their future viability.

The Congressional Joint Committee on Taxation estimates the deduction cap will generate $1.1 billion in additional revenue over eight years. Critics say lawmakers snuck this change into the massive bill without thinking about what it would do to the gambling world. 

The House didn’t even have this gambling rule in their version, so there is still a chance it could get taken out or fixed when both sides work out the differences. However, with Trump set to sign the legislation, time for changes appears limited.

Casual bettors probably won’t feel this as much since most of them lose money anyway or only win small amounts. But for professional gamblers, this could be a death blow that completely changes how legal betting works in America.