A select but diverse group of poker players, tax professionals, lobbyists and hobby gamblers spoke up against a gambling tax change that is anticipated to have devastating impacts on gamblers of all kind, from serious poker players to casual sports bettors.
The controversial provision, which caps gambling loss deductions at 90% of winnings, meaning players will be taxed 10% on gross winnings, was passed by Congress last year through the Big Beautiful Bill (OBBBA). The change went into effect in January.
On Friday, the Internal Revenue Service (IRS) held a public hearing, which PokerNews attended remotely, to allow interested parties to discuss the gambling tax change. A dozen individuals were scheduled to speak, ten showed up, and all of them spoke against the tax change, which has been called a “death sentence” for poker players.
Here’s What Tax Experts Want Poker Players to Know About Trump’s ‘Big Beautiful Bill’
“The Consequences Are Substantial”
The first scheduled speaker was U.S. Rep. Dina Titus, a Democratic congresswoman from Nevada who has spearheaded the fight against the gambling tax change.
Though the IRS is merely responsible for implementing the change and has no authority to repeal it, Rep. Titus told the IRS board that they should be aware that “the consequences are substantial,” both for professional gamblers and casual players.
“For decades the tax code allowed tax payers to deduct gambling losses up to the amount of their gambling winnings,” said Rep. Titus, who has spoken about the tax change on the PokerNews Podcast. “This reflected a straightforward principle: taxpayers should be taxed on their actual net income, not on money they never really earned.
“Taxing phantom income is inconsistent with sound tax policy and with the fundamental principle that the tax code should measure economic gain. It unfairly burdens professional gamblers and casual players alike, and will inevitably drive players towards offshore and unregulated markets.”
Another speaker, poker author and journalist Sara O’Connor, said that the new tax law “punishes volume and honesty,” arguing that it incentivizes poker players and other gamblers to not report their gambling income.
“Phantom gambling income is not true income,” O’Connor told the board.
Poker content creator Joshua Thatcher, better known as “PLO Professor”, agreed that the change “encourages more illegal behavior” and off-grid betting, adding that there would be an “overall negative impact” across various gambling industries.
Far-Reaching Impacts
The change could even push tax-paying gamblers out of the country. Longtime poker pro and commentator Katie Stone told the panel that she and her family moved out of the U.S. in the aftermath of Black Friday in 2011, which shut down online poker across the country.
While several measures to repeal the gambling tax have failed, poker watchdog Todd Witteles had a suggestion. The Poker Fraud Alert founder recommended that the IRS postpone the implementation of the tax change, allowing for more time to study the potential consequences and for repeal efforts to reach fruition.
Witteles also said there are a number of things that need to be “very clearly defined,” such as whether professional poker players can fully deduct business expenses, as well as rake and buy-ins.
“Definitely business expenses should not have any kind of 90% limit, because they are expenses, not losses,” said Witteles. “And that does need to be clarified.
Others who spoke at Friday’s hearing include Mike Vanaki of the American Gaming Association, poker player and recent RunGood Poker Series (RGPS) Pennsylvania winner James Cloutier, and Gary Kondler of the gambling tax firm Kondler & Associates.
Ray Kondler CPA: Inside the New 10% Gross Gambling Tax Rule
Connor Richards
Senior Editor U.S.