If you gamble in Las Vegas, Atlantic City, or even online, there’s a change coming in 2026 that could hit your wallet harder than you think. It’s part of President Donald Trump’s new tax-and-spending plan — and it has many players worried.
Right now, when you win money gambling, you can deduct up to 100% of your losses — but that changes in 2026. And if you think this only affects high rollers, think again. This new law touches everyone, from the average lottery player to folks betting on the Super Bowl.
What is the current tax rule for gambling losses?
Here is how it works at the moment:
- If you win $1,000 gambling, and you also lost $1,000 that year, you can deduct all those losses — if you itemize deductions on your taxes.
- That means you pay no tax on the $1,000 you won, since your losses canceled it out.
But that’s only if you itemize. Most Americans today use the standard deduction, so this rule only helps a certain group of people.
What changes under the 2026 gambling tax law?
Beginning in 2026, gamblers will only be allowed to deduct 90% of their losses.
Let’s break it down simply:
- You win $1,000 on a bet.
- You lose $1,000 later in the year.
- You can only deduct $900 of those losses.
- That means the IRS will tax you on the $100 difference — even though, in reality, you broke even.
Tom O’Saben, a director at the National Association of Tax Professionals, explained it clearly:
“Instead of gambling losses being deductible to the full extent of gambling winnings, they’re going to be limited to 90%.”
Will this affect casual gamblers too?
Yes, absolutely. Even if you only gamble occasionally, this new rule could cost you more in taxes.
Also important to remember:
- You cannot deduct what you spend on travel, hotel stays, meals, or anything else tied to gambling.
- That was the case before and still stays the same after 2026.
Mark Steber from Jackson Hewitt Tax Services put it bluntly:
“Casual gamblers cannot deduct expenses related to their lodging, transportation, or food.”
So whether you’re in Vegas for fun or betting on your phone from home — those costs are on you, and always have been.
Why are gamblers and casino groups upset?
To many players, this feels like a hidden tax. A 10% penalty on winnings — even if they lost the same amount. Some fear this will push people to avoid reporting their winnings. Others say it encourages using illegal or unregulated gambling sites to dodge taxes.
U.S. Rep. Dina Titus from Nevada introduced a bill called the My FAIR BET Act to fight this change. She said:
“We should be encouraging players to properly report their winnings and wager using legal operators.”
The American Gaming Association supports her. Big names like DraftKings, MGM Resorts, and Churchill Downs want Congress to bring back the full 100% deduction.
What does this mean for Las Vegas and Atlantic City?
People go to Vegas and Atlantic City chasing big wins — and the dream of walking away with more than they came in with. But with this tax rule, even if you break even, you might owe the IRS.
Russell Fox, a Nevada-based tax preparer and poker player, said on social media:
“Vegas was built on the dream, and if that dream is removed by a bad law, Vegas will be hurt.”
And he is not alone in that belief. From casual players to professionals, this change affects the whole gambling world.
