It’s now been a few days since the Big Beautiful Bill was signed by the US President Donald Trump. With this final step, the Bill became the law, with all its many provisions and stipulations.
The changes that are coming will impact many, and, thanks to the last-minute provision that was added to the Big Beautiful Bill, gamblers will be one of the impacted groups.
You’ve probably read and heard about it already, but, in short, moving forward, gamblers will only be allowed to deduct 90% of their losses. This created quite a turmoil, especially in the poker community, leading many players to wonder what this means moving forward and if the change would make it impossible to make a living as a poker pro.
Although this is still very much a hot topic, now that the dust has settled a bit, we are getting a bit more clarity on what the immediate future might look like for different types of players, as well as what might be in store from the legal perspective to try and rectify the damage.
Who Will Suffer the Most?
One thing that’s pretty clear is that the new tax hike will impact the gambling industry as a whole, affecting all poker players, bettors, and other gamblers of all shapes and sizes from 2026. However, not everyone will face equal financial ramifications.
Poker is one of the rare activities that are lumped under gambling, where people are able to make a consistent profit thanks to their superior skills. Because of this, professional poker players probably make up the largest group of professional gamblers whose profitability could be seriously hurt due to this latest change.
Phil Galfond, a long-time pro player and this year’s Poker Hall of Fame nominee, has been very active, trying to understand the full impact and explain what certain types of players can expect.
In a nutshell, and not surprisingly, this change will hit the high-volume players with low profit margins the hardest. To make it easier to digest, Galfond explained it in terms of rake, summarizing it as:
- Paying 3.5% extra rake for tournament players, or
- Paying 0.75 big blinds/100 hands for online cash game players
This, of course, applies to winning players. Some of them could face the risk of paying taxes on “phantom winnings,” i.e., being taxed on an amount that’s significantly higher than their profits.
In the simplest of terms, a player with $120,000 in winnings and $100,000 in losses has a clean profit of $20,000. However, since they can only deduct 90% of their losses, their actual taxable “profit” is $30,000 ($20,000 + $100,000*10%).
Of course, the exact amount of taxes owed will depend on one’s tax bracket. As Galfond points out, this will particularly affect players who may have other sources of income, putting them into a higher tax bracket to begin with.
The Silver Lining
The “good” news is that, although this is pretty bad, it won’t make playing poker professionally completely pointless. According to Galfond’s calculation model, a decent number of players will still be able to make a solid profit, but their bottom line will still be affected.
The numbers show a median decrease in income of 4%, which is bad, but not career-ending bad. However, that median doesn’t explain the entire situation, as, for some, like Triton high roller players, who play a lot of big buy-in events with very low edges, the impact will be massive.
For those playing in games where they have a bigger edge over the field, this won’t be as much of a problem.
On the overall, there is no denying that new tax provisions are bad for poker players, and this is without even going into details of pro sports bettors, who have to deal with very slim edges to eke out a profit. They could well and truly be pushed out with these changes.
What Comes Next?
When the Big Beautiful Bill passed the Senate with these last-minute provisions, the poker community tried to rally support and stop its passage. This did not work, so the question everyone’s asking is: what comes next?
On the political side of things, Dina Titus, US Congresswoman for the District of Nevada, promised to come up with a fix. Titus came good on her promise already, introducing the Fair Bet Act, which seeks to restore the 100% deduction for gambling losses.
Within the poker community, some of the most prominent figures are doing all they can to influence things. Among them is Daniel Negreanu, who announced in one of his recent WSOP vlogs that he’s been reaching out to many people who can help with the situation.
Russell Fox, a poker player and a licensed tax professional, has been the voice of reason throughout this whole ordeal. While the new law is bad, Fox seems fairly convinced that it will be overturned in one way or another, as this hurts the gambling industry as a whole.
The bottom line? While this is certainly not a great time for pro poker players in the US, there are many positive indicators that the change may not be here to stay, and that it might be overturned before it even comes into force.
While things are happening behind the scenes, it is still important for everyone to continue reaching out to their representatives. With a bit of luck, this whole thing will go away before it ever becomes a real issue!
