A pair of academics recently teamed up on a study arguing against restoring the law that allowed 100% tax deductions for gambling losses. In fact, the professors believe there should be no gambling deductions.
The study was conducted by University of Alabama law professor Mirit Eyal-Cohen and Rutgers University professor of taxation Jay A. Soled. The One Big Beautiful Bill Act, which went into effect on Jan. 1, lowered allowable deductions to 90%.
Poker players were the first to sound the alarm on the issue. They pointed out the law could create “phantom income,” whereby gamblers pay taxes on money they didn’t win. In fact, poker legend Erik Seidel said the new law could force him into retirement.
But the pair of academics didn’t just stick to a study. They amplified their beliefs with an op-ed on the subject in The Hill.
“Because gambling is a form of entertainment, the tax code should eliminate gambling loss deductions in their entirety,” the professors said in the op-ed. “More specifically, it is a form of personal consumption – not a productive economic activity. As such, the tax code precludes expenditures of this nature from being deductible (e.g., food and shelter purchases), as opposed to business and investment-related expenses, which are deductible (e.g., office supply purchases).”
Deduction Mostly Affects Wealthy Americans
Beyond the entertainment aspect of gambling, the study also notes that gambling deductions don’t apply to most people. Statistics back that up, as the Tax Policy Center reports that only 10% of tax filers itemized deductions in 2022.
That was down from 31% in 2017 and came as a result of the Tax Cuts and Jobs Act, which became law that year and significantly increased the standard deduction. The act also restricted or eliminated some itemized deductions through 2025.
The One Big Bill further increased the standard deduction.
“High-income taxpayers are much more likely to itemize than others,” the Tax Policy Center reports. “In tax year 2022, nearly two-thirds of tax returns reporting adjusted gross income (AGI) over $500,000 itemized deductions, compared with 10% of those with AGI between $50,000 and $100,000 and 2% of those with AGI under $30,000.”
The changes, however, could negatively impact high-stakes poker players and sports bettors. Some critics have predicted the changes will have major repercussions on the gaming industry as a whole.
Trump Expected To Be Asked About Tax Issue On Las Vegas Trip
Despite congressional efforts to reverse the tax change, the 90% deduction provision remains in effect. President Trump visited Las Vegas on Thursday to hold a roundtable discussion and rally on his administration’s tax policies.
But Rep. Dina Titus (D-NV), who filed legislation to eliminate the new provision, urged locals to question him on the tax policy as well.
When @POTUS comes to Nevada this week, we must urge him to restore the 100% tax deduction for gambling losses. That’s fair policy. pic.twitter.com/tP1ehqUCrw
— Dina Titus (@repdinatitus) April 13, 2026
In December, Trump signaled that he could support eliminating gambling taxes altogether, let alone restoring the 100% deduction.
