"A dire warning issued by Galfond as 'Big Beautiful Bill' bill moves forward in poker circles"
The US Congress has passed Donald Trump's budget bill, known as 'The Big Beautiful Bill.' One of the bill's provisions could have significant implications for poker players and the gambling industry as a whole.
The amendment drafted in the bill aims to limit the deduction gamblers can claim on their gambling losses, capping it at 90% rather than the full 100% currently allowed. This means that poker players and other gamblers could be taxed on what is effectively "phantom income"—taxable income despite breaking even or even losing overall during the year.
This provision is likely included as a revenue-generating measure, projected to raise over $1.1 billion in tax revenue over eight years. Republican defenders argue it was a necessary procedural change tied to budget rules, despite opposition from some senators and ongoing bipartisan legislative efforts to repeal or modify the tax limit.
If the provision remains in place, the potential effects on the poker industry and gamblers include increased tax liability for both professional and recreational players, even when their losses equal or exceed their winnings. This could discourage gambling activity or push professional gamblers to reconsider their tax strategies due to the impairment of profitability and alteration of betting behaviors.
The poker and gambling industries might see indirect economic impacts if player participation decreases or if players face significantly higher effective tax rates, potentially reducing overall gambling revenue. There is active legislative pushback aiming to restore the full 100% deduction, reflecting the industry's and some lawmakers' concerns about the amendment's fairness and economic effect.
Notable figures in the poker world, such as Phil Galfond, have expressed concerns about the amendment. Galfond believes it was drafted without understanding gambling nuances, potentially resulting in taxing people an amount larger than they earned. He also clarified that while the bill could make it difficult for many poker pros, the big winners will still remain.
Rep. Dina Titus (D-NV) has expressed concern that the amendment could push people into the black market, while some fear it could lead to more poker games going offshore due to the increased appeal of unregulated sites.
As the bill is now ready to go to Donald Trump for his signature, reactions to its passing are starting to come in, and this is a developing story. Poker players and gamblers are encouraged to spread the word and contact their representatives to express their concerns about the bill.
In summary, the tax amendment was likely designed to raise government revenue but will lead to poker players being taxed on income they do not actually earn, thereby potentially reducing the attractiveness and profitability of professional and recreational poker under this new tax regime.
- The tax amendment in Trump's budget bill could have far-reaching implications for the online poker community, as it limits the deduction for gambling losses, potentially increasing tax liability for both professional and recreational players.
- The gambling industry, including casino games and online poker, may face financial challenges if the new tax amendment remains in place, as decreased player participation or higher effective tax rates could result in reduced overall gambling revenue.
- Poker professionals like Phil Galfond are expressing concerns about the new tax amendment, primarily because it may unfairly tax poker players an amount larger than they actually earn, potentially leading to increased activity on offshore, unregulated sites and pushing some into the black market.
