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Nov25.indd 1 STATESIDE Happy 2026!
Sharon Harris gets ready to tackle what will no doubt be yet another turbulent twelve months. Buckle up!
5/11/25 17:30
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hope you enjoyed your holidays with those near and dear to you. In these times, the world certainly needs good news. Traditionally, January means a new group of laws-many enacted individually by each state-crop up in the U.S. However, those with national impact do cross state lines. This year is no different. Gamblers nationwide will confront revisions to the tax formula for their losses. The July 4, 2025 passage of President Donald Trump’s 900-plus- page One Big Beautiful Bill (OBBB) took effect on January 1. After more than 70 years of specific tax rules and scrutiny, the OBBB will disrupt that norm.
The OBBB includes an amendment to the Section 165(d) Internal Revenue Code (IRC) gambling legislation. Originally part of the
12 JANUARY 2026
Revenue Act of 1954, the new provision decreases deductions down to 90 percent of individual wagering losses. This 10 percent reduction will now also apply to professional gamblers’ nongambling loss expenses like travel costs, entry/admissions fees, data subscriptions and other business disbursements.
So, why, after seven decades, would this become the law? Some experts cite the reason as a way to offset revenue from earlier tax cuts or extensions and raise a projected $1.1 billion over eight years.
Another possibility is its potential limited effect on the general population. In other words, many Congressional legislators may have considered this route as somewhat innocuous because this provision would affect
mostly professional and high-net-worth gamblers wagering large amounts.
That makes sense if you analyze the data. During the 2020 Covid-19 pandemic, IRS statistics revealed that only 0.4 percent of total personal income returns that year reflected itemized deductions for gambling losses. That hardly represented a population segment that would influence tax policy. Of course, gaming properties nationwide faced unprecedented restrictions and regulations, but the totals have not changed much.
Further history is also needed. Section 165(d) states that losses from “wagering transactions” may be deducted to the extent of gains from gambling activities. In other words, taxpayers may only deduct losses that are below or equal to gambling wins. It was originally written to prevent
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