More Gambling Winnings Are Taxable Under OBBBA

Do you like to gamble? If so, Congress has some bad news for you.

The One Big Beautiful Bill Act (OBBBA), recently passed, limits how much you can deduct for gambling losses starting in 2026. Both casual and professional gamblers may deduct only 90 percent of their losses against their winnings. The remaining 10 percent of losses disappear permanently—you can’t use them in future years.

Congress added this last-minute change to the OBBBA, which could significantly impact gamblers.

What This Means for You

Right now, gamblers may deduct losses only up to the amount of their winnings. Casual gamblers may deduct losses only if they itemize personal deductions. Beginning in 2026, you won’t even deduct all your losses.

This rule could force you to pay tax on “phantom income”—money you never really earned. For example, if you win $10,000 and lose $10,000 in 2026, you’ll report $10,000 in gambling income but deduct only $9,000 in losses. That leaves you with $1,000 in taxable income, even though you broke even.

Current Efforts to Reverse the Law

Gamblers across the country have expressed outrage, and lawmakers have already introduced three bills to eliminate this 10 percent haircut. Whether Congress will act remains uncertain.

What You Should Do Now

Regardless of what happens in Congress, you need accurate records of your gambling activity. Keep detailed records of your wins and losses, especially losses.

Track your gambling by session, not by individual bet. At year’s end, add up all winning sessions separately from all losing sessions.

Don’t rely on casino win/loss statements—they often inflate winnings and underreport losses. Your next step? Check out our Proactive Tax Strategy & Planning for Business Owners. While you're there, take the 2-minute Tax Strategy Assessment and get some free tax strategy ideas. We provide these articles as general information and not individualized tax advice.  They do not constitute a client relationship with you, and any information provided here should be applied at your own risk.