Digital Wager Wire highlights the most significant events affecting the domestic and international sports betting and gaming industries each week throughout the year.
Government Shutdown Derails Plans to Restore Gambling Tax Loss Deduction
In President Trump’s One Big Beautiful Bill, a tax credit allowing gamblers to deduct 100% of their losses was decreased to 90%, drawing the ire of bettors and legislators alike.
In other words, a bettor who won $100,000 over the year could deduct their gambling losses at 100% to offset their tax obligation. If that bettor lost $100,000, they would be able to deduct the entire amount, leaving them with a tax obligation of zero ($100,000 win – $100,000 loss = 0).
However, under the new bill, only 90% is permissible as a deduction, which means that of the $100,000 loss, only 90%, or $90,000, is allowed as a deduction. In this scenario, the gambler would be obligated to pay taxes on the difference ($100,000 – $90,000), or $10,000.
This is a big issue for big bettors, and it could force those gamblers into the welcoming arms of local bookmakers or other online gaming sites that are not established in the US and do not have an obligation to report wins or losses. The potential loss of revenue is concerning to legislators in gaming states like Nevada and New Jersey.
Nevada Senator Cortez Masto commented, “Taxing people on money they don’t have will stifle the tourism industry in states like Nevada, push poker tournaments offshore, and drive betting into underground, unregulated markets. There is bipartisan support to fix this mistake, and it is time for my colleagues in both parties and chambers of Congress to get it done.”
However, despite zealous bipartisan support to repeal the new tax code that comes into effect on January 1, 2026, the government shutdown has taken the focus off issues like these and put it squarely on getting the government back on its feet.
New York Law Would Crack Down on Sportsbooks, Lowering Betting Limits
A hot-button topic throughout the nation has been US sportsbooks arbitrarily lowering sports betting limits on winning customers. In fact, it has garnered so much attention that legendary sports bettor Billy Walters, the subject of a 60 Minutes segment, spoke on this very topic last year before the National Committee of Legislators from Gaming States.
The creation of Assembly Bill A09125, also known as the Fair Play Act, sponsored by Assemblymember Alex Bores, would prevent sportsbooks from decreasing wagering limits on successful bettors.
Should the bill win approval, US-licensed sportsbooks would be required to email customers 24 hours before their limits are reduced, stating the reason, which would have to be due to suspicious betting activity or responsible gambling concerns.
The bill has been referred to the Racing and Wagering Committee and will be discussed when the New York legislature reconvenes in January.
