Just imagine that you’ve worked hard for a decade to claim your spot amongst the world’s professional poker players and you’ve had a nightmare year, losing $100,000.
You then have the tournament result of a lifetime for a $100,000 payday to repair all of the damage to your bankroll. No profit but at least you don’t owe any taxes, right?
Well, that’s where things might be changing for the US-based player pool, because the IRS now says that you can only offset 90% of your losses. So, in this case you’d be adding $10,000 to your income tax liabilities — money that never even touched the ground in your account!
Well, after all this has had time to sink in, the US-based poker community is now grappling with a potential new reality that threatens to change the face of professional poker in the country forever.
Tax experts: Does this interpretation sound right to you?
Gambling tax expert, @russcfox, doesn't see it this way. (his reply below)
I'd love more experts to comment. I'm getting interview requests about this (spreading the word is working!).
I'd like to get it right. https://t.co/Yn00VHH30T
— Phil Galfond (@PhilGalfond) July 2, 2025
Phil Galfond gives His Take on this Nightmare Situation
The OBBBA was outlined to lawmakers as a budget reconciliation bill, but it’s turning out to be so much more.
On the evening of July 3, this amended version only just passed in a 218-214 vote in the Senate, and polling indicated that a majority of Americans are against it. More worryingly, we know that a majority of lawmakers didn’t even read the monster 900-page document before voting.
Unless something significant throws a spanner in the works, these changes will begin in 2026.
Phil Galfond got straight on with the business of calculating just how much of a nightmare this will be for poker professionals who are playing even the modest end of mid-stakes.
Let’s say that a pro who earns a tidy sum of $200,000 has something like $3,000,000 in winning sessions over the year and then $2,800,000 in losing sessions.
According to the OBBBA that would mean deductions could only total $2,520,000, leaving the player/victim on the hook for $480,000 in taxable income for a real profit of $200,000.
Galfond added:
“For pros, your travel, coaching, software, etc. are lumped into the ‘loss’bucket and still subject to the 90% cap.”
One poster in Galfond’s thread pointed out that tax revenue from poker players is so insignificant that even if every player was honest the difference doesn’t amount to much.
Galfond responded that somebody must have pushed for this addition onto the bill but he has no idea who would do such a thing.
If there’s one thing to be thankful about here, it’s that at least 90% deductions are allowed, because in the case of players based in Spain, 100% of winnings above €1,000 are taxable with zero deductions allowed.
What Do the Experts Say?
It didn’t take long before those educated in the matter of tax had their say on how all this is going to play out.
Ray Kondler, a founder of Kondler CPA which deals in all types of gambling taxation, said he thinks it will have a major effect on the industry.
“I think it could affect gambling big time, in all gambling. Because people, if they always have to show profits, (it) might negatively impact them coming to casinos, playing online … So it could have a major effect on the industry.”
He added that the situation is not yet catastrophic due to ambiguities in the bill text regarding this 90% deductions limit.
Having been hit with numerous questions on the new gambling tax law (which doesn't go into effect until 2026), some thoughts in this thread🧵 1/n
— Russell Fox (@russcfox) July 3, 2025
Tax consultant Russell Fox spoke in an interview about “technical corrections bills”, mentioning that they are common in tax legislation.
He said that there are still plenty of “bad laws” in the US but gave an off-the-cuff estimation that there is a 25% chance of the OBBBA getting reversed by the end of 2025.
“Bottom line: this 90% limit may seem minor, but it could slow down gambling-related spending, hurt professional players, reduce international traffic to U.S. casinos, and make tax compliance messier.
“It would be smart for the House to take a closer look at this proposal, hear from people in the industry, and really weigh the economic consequences before moving forward.”
Republicans hurt Las Vegas gamblers and the gaming industry with their BS budget.
I am working on a bill now that would reverse this unfair anti-gaming tax provision. pic.twitter.com/kDoNuDC726
— Dina Titus (@repdinatitus) July 3, 2025
Democrat Party Congresswoman Dina Titus has already announced in a TV interview that she is working on a new bill, calling this OBBBA amendment an “unfair anti-gaming tax provision.”
She said:
“Well we’re going to try to take it out. It could then go back to rules. We can’t now introduce a separate bill.
But it pushes people into the black market if they don’t do regulated gaming because they have a tax disadvantage. And the black market doesn’t pay taxes, isn’t regulated, doesn’t have Problem Gaming. So it’s bad for the industry as well as for the player.”
The passage of the One Big Beautiful Bill Act significantly enhances our industry’s ability to sustain quality jobs and deliver economic benefits — and we look forward to President Trump’s expected signature. pic.twitter.com/gEvfABL665
— American Gaming Association (@AmericanGaming) July 3, 2025
Will We See Support from the Gaming Industry?
Surprisingly, the American Gaming Association tweeted a statement that framed the OBBBA as hugely positive, lauding its positives towards job creation and other economic benefits.
Given the tone of most of the reporting on this bill, you might have to do a double-take here.
The promise to work with the government to address concerns about the tax changes sounds just like an afterthought, if we’re honest.
One poster, before replies were turned off, wrote:
“Holy shit you should immediately fire whoever wrote this along with whoever decided to wait until after the bill was passed to comment on a bill that will be seriously detrimental to the casinos you represent.”
Update on the “Poker Players Death Tax”
I heard from @tedcruz today. Senator Cruz is fighting to eliminate the “Poker Players Death Tax” (someone is trying to eliminate poker playing in the United States of America!!). Ted is the lead Republican on the bill
Ted introduced…
— phil_hellmuth (@phil_hellmuth) July 11, 2025
The AGA might put in a word for poker players on this matter but one area of support that we didn’t immediately expect was from Senator Ted Cruz.
Phil Hellmuth has been in contact with the politician and received news that he is “fighting to eliminate the ‘Poker Players Death Tax.’”
But it turns out that it was his Republican colleagues who scuppered a late attempt to reverse this 90% deduction on gambling losses.
Senator Catherine Cortez Masto (D) of Nevada went down the avenue of seeking unanimous consent but was blocked by Senator Todd Young (R) of Indiana.
Masto told the media:
“This is a Republican piece of legislation that is actually causing people to pay taxes on money they lost. It makes no sense at all. I’m disappointed, but I’m not done.”
Check out the video below for a long-time poker professional’s view on how this will affect poker players in the United States.
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