The so-called big, beautiful bill may lead to an ugly outcome for gamblers.
Various online accounts of the Senate version of the massive piece of legislation that has ping-ponged back to the House of Representatives indicate that a change to the tax rules for gambling could make it much harder to ultimately turn a profit.
Apparently, deductions to gambling winnings will (under the Senate’s version of the bill) be limited to [90 percent of losses](https://www.cbiz.com/insights/article/the-one-big-beautiful-bill-act-back-to-house-for-approval-detailed-analysis). Which means that, to put it very simply, $100,000 in winnings against $100,000 in losses will be treated for tax purposes as if the losses were only $90,000.
Which also means that, even if it’s a wash for the gambler, taxes will be owed on $10,000 that the gambler didn’t actually earn.
The more someone gambles, the harder it will be to turn a profit. Because the total losses that offset the winnings will always be reduced by 10 percent.
If you’re as confused as we are, [check out this video](https://x.com/PhilGalfond/status/1940198538493010316) from Phil Galfond. The end result could make it much harder to be a professional gambler.
Which becomes, in a roundabout way, another win for the house. Since professional gamblers are far more likely to make money than casual gamblers, tax laws that drive them away from the business of gambling is good for the purveyors of gambling, since it will thin the herd of those who are more likely to win. And that will leave the gambling industry with the casual gamblers who are more likely to lose.
Whether the 90-percent limit on losses makes it to the final version of the big, beautiful bill remains to be seen. But it’s something that could impact gamblers in a significant way — and that could scare off those gamblers whom the casinos and sports books fear most: The small percentage of gamblers who are smart enough to consistently win more money by gambling than they lose.