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A new US tax law could change the gambling experience for Americans in 2026, with President Donald Trump’s One Big Beautiful Bill Act (OBBBA) could see take-home winnings reduced.
Do you have to pay tax on gambling winnings in the US?
Where previously bettors could deduct all of their losses from their total winnings when calculating their taxable income, the provision would mean that only an amount equal to 90% of losses can now be deducted. That could see betters lose money when it comes to the tax season.
For example, someone who has won $10,000 in bets but also experienced $10,000 in losses would still have to pay taxes on $1,000 of what they took home. This would see them worse off than when they began. It’s estimated that the law change could raise $1 billion in funds for the US government, according to estimates from the Joint Committee on Taxation.
US gamblers will need to be luckier in order to come out on top overall, as the new tax law comes into place.
Attempts are already underway to reverse the change
The change has faced pushback from gambling groups across the US, with Representative Dina Titus in Nevada introducing the FAIR Bet Act last year in an attempt to reverse the change to gambling deductions and bring it back to 100%.
Earlier this year, the Big, BS Budget Bill changed how gambling losses are taxed by capping the deduction at 90%. That means some gamblers will owe taxes on money they never actually earned when they file starting in 2027.
But we still have time to fix this. As long as we… https://t.co/UrtRQCHp0a
— Dina Titus (@repdinatitus) December 29, 2025
“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 help with problem gaming,” the Democrat said at the time. “So it’s bad for the industry as well as for the player.”
Titus went on to criticize other parts of the bill beyond gambling, arguing that it was “bad enough for my constituents” in various other areas as well. In December 2025, she pushed for a committee to help the FAIR Bet Act progress further.
New state gambling laws in 2026
As well as these changes at a federal level, several states are also introducing new laws at state level. That includes a widespread crackdown on sweepstakes casinos using dual currencies, with New York banning promoting sweepstakes gambling, New Jersey banning such games altogether, California’s ban starting on January 1, and Indiana launching its first hearings after banning sweepstakes last year.
Michigan, Connecticut and Montana are also considering legislation that would affect prediction markets. Indeed, states across the country were reviewing legislation related to prediction markets that could carry through into 2026.
Featured image: Flickr, licensed under CC BY-SA 2.0
