Despite bipartisan support to repeal the new law that lowers tax deductions on gambling losses from 100% to 90%, an Oklahoma senator has come out in support of the tax change.
He’s the first federal lawmaker to publicly oppose any attempt at repealing the gambling tax change in the “One Big Beautiful Bill.”
Sen. James Lankford, R-OK, told Punchbowl News that he was against rolling back the provision. The new law creates “phantom income,” whereby a gambler would have to pay taxes despite having more losses than gains in a year.
“It’s not an unrealistic change,” Lankford said. “It’s a pretty minor change in that tax policy.”
Not only is Lankford the first lawmaker to vocally oppose the change, but it comes after Nevada’s lone Republican said the changes were on the way.
Major Impact On Industry
The senator’s opposition to rescinding the tax change comes despite a robust tribal casino industry in Oklahoma. According to the state’s Gaming Compliance Report, Oklahoma tribes generated over $3.64 billion in revenue from Class III electronic games and non-house-banked card games, including poker, during the 2025 fiscal year (July 2024 through June 2025).
That accounted for $221 million in payments to the state, a 5% increase over the previous fiscal year.
Even before President Donald Trump signed the tax change into law, poker players and casino executives warned of the major impact the law would have on the gambling industry. In December, several casino executives met with lawmakers in Washington D.C., in an effort to rescind the law.
Poker legend Erik Seidel has said the change may put him into semi-retrement.
Oklahoma Wants Non-Residents To Pay State Taxes On Winnings
Lankford’s comments come as his state is making a concerted effort to get non-resident winners at the state’s casinos to pay Oklahoma taxes on winnings.
However, there are no commercial casinos in the state. This creates a scenario where tribes would have to cede sovereignty and start withholding state taxes for non-resident winners.
“The Oklahoma Tax Commission is taking the position that this rule doesn’t apply to gambling winnings,” Las Vegas tax expert Russ Fox recently noted in his Taxable Talk blog. “An Indian tribe can voluntarily cede sovereignty, and a tribe is required (in order to have casino gambling) to have a compact with the state. However, I’m unaware of any tribe that has ceded this for taxes.”
Fox noted that there is ongoing litigation on the issue. He believes the Supreme Court may eventually have to decide the issue.
