Legislation: The One Big Beautiful Bill Act (OBBBA) and Its Effects on Poker Enthusiasts
The One Big Beautiful Bill Act (OBBBA), a budget reconciliation bill, is poised to significantly reshape the landscape of professional poker in the United States. This legislation, expected to come into effect in 2026, aims to limit tax deductions for professional gamblers, including poker players.
Currently, professional poker players can fully offset their taxable income with gambling losses when filing taxes as self-employed on Schedule C. However, the OBBBA introduces a 90% cap on deductible gambling losses and related expenses, a significant departure from the current 100% deduction. This change applies not only to gambling losses but also to expenses related to gambling activities, such as research tools or data platforms that professionals rely on.
The 90% cap means that professional poker players will effectively be taxed on a higher net income, which could be much greater than their actual net profits. For instance, a pro with $3 million in winnings and $2.8 million in losses under the new rules would only deduct $2.52 million in losses, resulting in taxable income that is significantly higher than their real earnings. This could lead to much higher tax bills even in years where players barely break even or lose money overall.
Industry insiders and professionals have expressed concerns about the potential impact of the OBBBA. Phil Galfond, a well-known figure in the poker world, has described the change as a "potential death sentence" for professional poker in the US. The concerns centre around the financial viability of playing poker professionally, as the OBBBA undermines the ability to offset losses effectively.
The American Gaming Association has voiced its support for the OBBBA, despite the concerns about its potential negative effects on the gaming industry and poker players. Meanwhile, Democrat Party Congresswoman Dina Titus is working on a new bill to amend the OBBBA's "unfair anti-gaming tax provision".
The OBBBA could slow down gambling-related spending, hurt professional players, reduce international traffic to US casinos, and make tax compliance messier. It could also considerably increase the overall tax burden on poker pros, even in losing or breakeven years.
In the midst of these changes, ACR Poker remains a leading US-facing online poker platform, offering promotions and tournament series that pay out life-changing money. Players can join the $3,000 VG Race and $250 Freeroll each month, and in July, there is an opportunity to win one of three Venom Main Event tickets. To be eligible, players must make an account before the end of the month, deposit $20, and play in the private VG Depositor Freeroll on August 10, at 21:00 CET.
Ray Kondler, a founder of Kondler CPA which deals in all types of gambling taxation, believes the OBBBA will have a major effect on the gambling industry. Senator Ted Cruz is reportedly "fighting to eliminate the 'Poker Players Death Tax'". Senator Catherine Cortez Masto (D) of Nevada attempted to reverse the 90% deduction on gambling losses but was blocked by Senator Todd Young (R) of Indiana.
It is crucial for the House to take a closer look at the OBBBA, hear from people in the industry, and weigh the economic consequences before moving forward. The potential impact on professional poker players, the gaming industry, and the broader economy necessitates careful consideration.
- The OBBBA's introduction of a 90% cap on deductible gambling losses could affect professional poker players' financial viability, as they might be taxed on higher net income due to limited loss deductions, even for expenses related to data platforms and research tools used in their gambling activities.
- As the OBBBA's impact on the gaming industry and professional poker players becomes more pronounced, some industry insiders, like Phil Galfond, are calling it a "potential death sentence" for poker in the US, urging the House to reconsider its implications on the industry and wider economy.
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