Several poker players, lawmakers, and gaming industry leaders testified to the IRS last week about how the gambling tax provision of the One Big Beautiful Bill would impact gamblers and how the provisions should best be implemented.
The provision allows poker players and other gamblers to deduct only 90% of losses. That can create “phantom income,” forcing some players to pay taxes on income that they didn’t receive.
Poker players sounded the alarm on the tax change in 2025. That included poker legend Erik Seidel, who announced that the provision would lead to his semi-retirement.
Poker player Todd Witteles was one of those speaking on a telephone-based IRS panel regarding implementation of the provision. Witteles suggested that gambling tax filers be separated by category. He thought with poker, sports betting, casino gambling, and “other gambling” should each have their own tax structures.
Witteles argued that this could prevent a phantom tax for each of these categories, reducing the burden for high-limit players.
“This allows for a lot more of a straightforward netting of gains and losses within each genre, makes it a lot easier for the gambler to track what they’re really up and down in each genre, which all differ from one another even though they’re all gambling,” he said during testimony.
“And it also greatly simplifies the compliance for the high‐volume players. It reduces errors, and it will also be easier on the IRS’s end to make sure that the gambler is complying with the law and is reporting accurately.
Clear Guidance Sought
Additionally, Witteles asked for online statements, app records, crypto records, bank transfer records, and other modern forms of record keeping to serve as sufficient proof of wins and losses in the case of an audit. He believes those serve the process better than the daily records or journals currently required.
The publisher of “Poker Fraud Alert” asked for clarification on a business expense as opposed to gambling losses.
“I asked for clear computational guidance for wins and losses to where if the gambler had actual losses or broke even, he is not taxed, as there was no income,” Witteles posted on X/Twitter.
I’m presently on the telephone-based IRS panel regarding implementation the 2026 “90% gambling loss limitation” law.
My testimony will be last, and will be exclusively focused upon implementation suggestions to make this easier on us.
So far Dina Titus and Sara O’Connor have…
— Todd Witteles (@ToddWitteles) July 17, 2026
Sara O’Connor, a regular in small and mid-stakes tournaments, was another witness during testimony. She explained the provision didn’t only impact high-stakes players. Recreational and casual players are affected as well.
“I also want to be clear about who this law affects,” she said. “I’m not here as a high‐stakes professional poker player. I’m a low‐stakes recreational player like most poker players in America. A player like me may cash out several winning sessions, several losing sessions, and several break‐even sessions and end the year flat or barely ahead. That’s normal. That is how poker works. There are wins, losses, variance, and volume.
“This rule punishes volume and honesty. This rule punishes Americans choosing to pursue legal entertainment activities. The IRS already requires taxpayers to keep accurate records of gambling winnings and losses. Good‐faith taxpayers who comply should not be penalized for having a complete paper trail.”
Poker Player Odds Of Winning
Former poker pro Katie Stone also testified along with poker content creator Joshua “PLO Professor” Thatcher, gambling and poker tax specialist Ray Kondler, American Gaming Association Director of Government Relations Mike Vanaki, and others.
Kondler looked at the burden the provision would put on tax filers and preparers. Stone offered insight on how tournament poker works and how the odds of actually winning are long. Some players may only break even over a long period of time. But they would be forced to pay taxes under the current circumstances.
“Every time you enter a poker tournament, you are supposed to lose statistically because you’re just one of a thousand players, or you’re one of 500 players, and you are very much not in favor to win first place,” she said.
“And so your skill edge in poker is what prevails over the variance, and the volume of the tournaments that you play is very important. That might look for me in a year as an online poker player, I might win $2 million in a year online, but because of the volume I’m putting in, I may have lost 1.9 (million) of that back. And so, at the end of the year, I’ve only made $100,000.”
Stone said the player would be responsible for taxes on $300,000 rather than $100,000.
“For me, as a married mother of a 10‐year‐old son in Houston, I simply cannot afford for my husband to have an extra $200,000 on his income taxes that we have to pay,” she said. “That would literally bankrupt me currently … but it would also have immediately taken me out of the game … if I was still playing full time.”
Lawmaker Urges Reduced Burden On Gamblers
Rep. Dina Titus (D-NV) has been a vocal critic of the tax changes and has sponsored legislation to repeal the provision. She also offered her view on the bill’s effects on the gaming industry and how to best implement the tax plan.
“In the last decade, the regulated gaming industry has greatly expanded in the U.S.,” she said during testimony. “While gaming was initially only found in Nevada, then Atlantic City and on a few Indian reservations, some form of gaming is now present in 48 states and in the District of Columbia.
“The domestic gaming industry supports 1.8 million jobs, $104 billion in wages and salary, and $53 billion in tax revenue for state and local government. Millions of Americans participate either occasionally or regularly, and they expect a tax system that is fair and reflects their true net income.”
Titus recommended that the Treasury Department and IRS implement a system that reduces unnecessary reporting burdens, minimizes disruptions on the casino floor, and provides clear guidance to both operators and taxpayers.
“Regardless of party or geography, we agree on a simple principle. Taxpayers should not be taxed on income they never actually received,” she said.
Titus hasn’t been the only lawmaker introducing legislation to repeal the tax provision. Rep. Steven Horsford (D-NV) and Rep. Max Miller (R-OH) filed HR 6985 in January.
One study recently reported that the tax change will cause an $18 billion hit to annual sports betting handle.
However, a pair of academics recently teamed up on a study. They argued against restoring the law that allowed 100% tax deductions for gambling losses. They believe that because gambling is a form of entertainment, the tax code should eliminate gambling loss deductions entirely.
