The surprise victims of Trump’s “Big Beautiful Bill”: poker players and gamblers

In the wake of the sweeping spending package — officially dubbed the One Big Beautiful Bill Act (OBBBA) — most headlines have focused on the bill’s major impact on Medicaid. However, as the dust settles, new reports are emerging about lesser-known provisions that were overlooked during the initial coverage.

One surprising inclusion? New rules on gambling earnings that could affect millions of Americans involved in online and in-person sports betting. The OBBBA also introduces tax changes with direct implications for poker players, signaling a significant shift in how winnings are reported and taxed.

How the OBBBA affects gambling earnings

Currently, gamblers are allowed to deduct 100% of their losses from their winnings when calculating taxable income. For example, if you win $10,000 through sports betting but lose $5,000, you only owe taxes on your net earnings of $5,000.

However, under a provision in the One Big Beautiful Bill Act (OBBBA), this is set to change. Starting January 1, 2026, gamblers will only be able to deduct 90% of their losses. This adjustment effectively increases the portion of winnings subject to tax.

Let’s revisit our earlier example: with the new rule, only $4,500 of the $5,000 in losses could be deducted. As a result, the taxable amount rises to $5,500 instead of $5,000.

The online betting boom has caught the IRS’s attention

The explosion of the online betting market in recent years hasn’t gone unnoticed by federal regulators. The IRS, in particular, has been tracking the surge in gamblers, especially in the online sports betting space.

In 2024, the agency reported that approximately 68 million Americans wagered a combined $23.1 billion on the Super Bowl in 2025 — a staggering 35% increase from the previous year.

The IRS also issued a warning to those engaging in illegal sports betting, emphasizing that participants will be subject to investigation. The agency estimates that annual revenue from illegal sports betting in the United States exceeds $700 million.

Nevada leader introduces bill to overturn the OBBBA provisions

There is a growing movement to repeal the changes related to deductions, allowing gamblers to once again deduct 100% of losses.

Representative Dina Titus (NV-D) has argued that the provisions will hurt Nevada’s tourism industry and has introduced the Fair Bet Act to reverse the change made in the OBBBA. “If we do not do this, more gamblers will move to unregulated and untaxed offshore markets; more gamblers will not report winnings; and revenue and jobs will be lost, not just in Las Vegas, but across the nation,” argued the Nevada leader. The congresswoman appears to have attracted bipartisan support for her legislation, but has faced some challenges in the Senate.

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