The Big Beautiful Bill, passed by Congress and signed into law by President Trump, was over 1,000 pages long. There's still a lot to digest.
Once sports bettors read the fine print, they were as angry as someone who put their life savings on red on the roulette wheel only to have the white bouncing ball land firmly on black.
Yes, many Americans, and especially Republicans, rejoiced at provisions that cut taxes, secured the border, and reformed Medicaid.
There is one section of the bill that impacts the gaming industry, that was overlooked by lawmakers, and targets a very select group of people: Sports bettors and poker players.
Many had a shocking and rude awakening when details of the bill slowly leaked out. They found they were targeted by the bill and could now lose big bucks to the taxman.
Professional gamblers saw the bill reduce potential gambling loss tax deductions.
Previously, if you lost big, at least you had the consolation of writing off the loss.
The "Big Beautiful Bill" ends that.
Professional bettors have to show their net winnings and pay taxes on those winnings as if it were regular income.
Like many other small business professionals, gamblers often offset losses with wins and then pay taxes on what would be left over.
To put it simply, if a sports bettor or poker player won $100,000 for the entire year, but they lost $50,000, they would pay taxes only on their winning returns.
So in the "old days," you'd then pay taxes on only $50,000 since you "lost" another 50k.
That has always been a simple and fair approach for the sports betting community.
The new bill changes this drastically, and the betting community is up in arms over the change.
What the new Big Beautiful Bill states is that the government will allow only 90% of losses to offset the winnings.
Meaning, that starting in 2026, that same bettor who won $100,000 but lost $50,000 would now be taxed on the higher amount "won", regardless of how much you lost after that.
In plain English, he would be taxed on money he never actually won.
That isn't the worst part.
If you are a losing bettor, but still consider yourself a professional as far as taxes go, you will be in ruin in no time, win or lose.
That's because under the new law, if someone were to win $400,000 but lose $500,000 in a year, they can only write off 90% of their losses.
So, you would have lost $100,000 already, and now you have to pay taxes on "winning" $40,000.
While the Senate Finance Committee projects this change to net the government over one billion dollars, the consequences are much greater.
Sports bettors and poker players are a very math-oriented and risk-averse bunch.
These are not people who gamble for the thrill of the game; rather, these professionals are very strategic in their wagering.
A 1% change here or there can shift a professional's mindset and view quickly, so you can imagine what a 10% move in the math will have and the type of ripple effect it can cause.
We don't have to imagine too much because professionals like Jack Andrews have called the bill one of the worst days as a professional gambler and went on to say, "We used to be considered self-employed small business owners. Now we're being treated as criminal second-class citizens."
Tim Steffes, a professional sports bettor, said the new bill will "bring new life to the offshore and illegal bookmaking business. Those guys are now back in the game."
Ryan Hogan, a professional poker player, was just as upset, asking if this "is the end of poker in America?"
He added, "Is this going to be the last [World Series of Poker] in the US? Sounds crazy, but I can't imagine how live poker tournaments could possibly still be a thing once this bill becomes law."
Fellow poker professional Matt Berkey agreed, saying, "This will bring High Stakes Tournament Poker in America to its knees. Imagine playing $5 million worth of buy-on chips, cashing for $4 million, and still have to pay taxes on $400K."
Within just days of the new bill being voted on, the outcry from professionals was so loud that Diana Titus, who represents the First Congressional District of Nevada in the U.S. House of Representatives, had already proposed legislation to overturn this change to the taxation of betting "losses."
Titus stated that in the bill, "there is a provision that harms poker players and those who gamble by limiting loss deductions. I'm working on a legislative fix that fairly treats gaming losses in the tax code."
Professional bettors won't stop betting; they will simply find other places to bet, most likely overseas, to avoid paying any taxes to the United States government.
Most professionals will take their action to other countries or use offshore books.
This will put a massive dent in the Las Vegas, Atlantic City, and other gambling-oriented destinations.
This bill won't net the returns the politicians are predicting, because there won't be anyone filing their taxes the "old way" in the United States anymore.
What's even worse for New Yorkers is that New York State Senator Andrew Gounardes has recently introduced an act to amend the Empire State's tax law to reduce the allowable itemized deductions for gambling losses to 0%.
New York State currently allows professional gamblers to deduct losses as long as they don't exceed winnings for the year.
New Yorkers could be paying double if this legislation prevails, so there can't be any gambling loss deductions on NYS tax returns.
If you wanted to kill the legalized sports and poker betting industry and bring back shady bookies and foreign books, these new federal and proposed state laws will do it almost immediately.
Broken nose Tony on the street corner will be back in business in 2026, with Uncle Sam being the biggest loser of the sports betting bunch.