{"id":68919,"date":"2026-07-01T19:45:20","date_gmt":"2026-07-01T23:45:20","guid":{"rendered":"https:\/\/bnonews.com\/?p=68919"},"modified":"2026-07-01T20:00:29","modified_gmt":"2026-07-02T00:00:29","slug":"break-even-at-the-sportsbook-and-still-owe-the-irs-the-2026-gambling-tax-that-wont-go-away","status":"publish","type":"post","link":"https:\/\/bnonews.com\/index.php\/2026\/07\/break-even-at-the-sportsbook-and-still-owe-the-irs-the-2026-gambling-tax-that-wont-go-away\/","title":{"rendered":"Break Even at the Sportsbook and Still Owe the IRS: The 2026 Gambling Tax That Won’t Go Away"},"content":{"rendered":"\n

Win $50,000 over the course of the World Cup, lose $50,000, and you have made nothing. Under the tax rules that took effect on January 1, 2026, the federal government will still treat $5,000 of that as income and tax it accordingly.<\/p>\n\n\n\n

That is the practical effect of a provision tucked into the One Big Beautiful Bill Act, the sweeping tax and spending law signed in July 2025. The change to gambling losses arrived late, inserted in the Senate version before the House passed the bill, and it went largely unnoticed against the size of the package. For decades, anyone who itemized could deduct gambling losses up to the full amount of their winnings, which meant a bettor who finished the year flat owed nothing. As of this year, only 90 percent of losses can be deducted. The remaining 10 percent is non-deductible, it does not carry forward, and it is taxed as though it were profit.<\/p>\n\n\n\n

Tax professionals have a name for the result: phantom income, money that appears on a return without ever reaching a bank account. The Joint Committee on Taxation estimated the change would raise about $1.1 billion over ten years. It applies across the board, to slot jackpots, poker tournaments, casino tables, daily fantasy contests, and sportsbook tickets alike. Professional players feel it twice, because the law also permanently folds their business expenses into the same capped pool, so travel, data subscriptions, and entry fees now compete for that narrowed deduction.<\/p>\n\n\n\n

The timing has sharpened the complaints. The 2026 FIFA World Cup<\/a>, the first to feature 48 teams and 104 matches, is on pace to be the most heavily wagered sporting event in history, with US sportsbooks alone projected to handle billions and global turnover estimated in the tens of billions. A payments-industry survey found that nearly three in ten American bettors are placing money on the tournament for the first time.  Many of those first-time players will meet the new math only when they file next spring, after a summer of wins and losses that no longer cancel out the way they once did.<\/p>\n\n\n\n

That paper trail is where the format of play starts to matter. The best mobile casinos<\/a> keep a running ledger of every deposit, wager, and payout inside the app, which hands a player something close to a ready-made session log the moment a return comes due, rather than a folder of screenshots to reconstruct in April. The IRS expects contemporaneous records, dates, amounts, games, and locations, not a vague year-end estimate, and its guidance on gambling income and losses<\/a> makes clear how little room there is for guesswork. A separate provision raised the W-2G reporting threshold for slots, keno, and bingo to $2,000, so more activity than ever is now matched against agency records. For anyone betting at volume in 2026, a built-in transaction history has stopped being a convenience and become the difference between a deduction that holds up and one that gets challenged.<\/p>\n\n\n\n

The arithmetic underneath all of this is what alarms regular players. A bettor who wins $75,000 and loses $70,000 finishes $5,000 ahead but can deduct only $63,000, leaving $12,000 in taxable gambling income. A poker professional who books $250,000 in winnings against $250,000 in losses, a genuine break-even year, still reports $25,000. The heavier the volume, the wider the gap between what a player actually earned and what the return says they earned. The sting can deepen at the state level, too, since several states tax winnings in full while disallowing loss deductions entirely, producing a bill even before the federal cap is applied.<\/p>\n\n\n\n

The provision has drawn rare bipartisan opposition, though that has not yet produced a fix. Representative Dina Titus of Nevada introduced the FAIR BET Act within days of the law’s passage, seeking to restore the full 100 percent deduction. Senator Catherine Cortez Masto filed a companion measure in the Senate, and two further bills, the FULL HOUSE Act and the WAGER Act, followed. The American Gaming Association has made repeal a legislative priority, arguing that the rule taxes a gain that never existed and nudges bettors toward unregulated platforms. Late last year, supporters tried to attach the FAIR BET Act to the annual defense authorization bill. The House Rules Committee declined to advance it, and the measure has sat in committee ever since.<\/p>\n\n\n\n

The pressure campaign has since gained celebrity weight. In May, UFC president Dana White wrote directly to President Trump, pressing him to push Congress to scrap the cap and warning that it discourages legal betting and penalizes everyday players. Trump, who signed the law, told reporters in December that he would think about the issue. Whether that becomes action is uncertain. Senior members of the Senate Finance Committee have described the 90 percent figure as a minor adjustment and shown little appetite for reopening it, and a fast-track attempt has already failed once.<\/p>\n\n\n\n

For now, the rule stands. Bettors who treated a roughly even year as a wash will need to budget for a liability that did not exist twelve months ago, and frequent players may want to revisit their withholding or estimated payments well before the tournament’s final whistle in July. The repeal effort is real, well organized, and backed by one of Washington’s more effective lobbies, but momentum and a vote are not the same thing. Until Congress moves, the safest assumption is the simplest one: the house, in this case the federal government, takes its cut whether you finished the year up or not.<\/p>\n","protected":false},"excerpt":{"rendered":"

Win $50,000 over the course of the World Cup, lose $50,000, and you have made nothing. Under the tax rules that took effect on January 1, 2026, the federal government will still treat $5,000 of that as income and tax it accordingly. 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