U.S. Sports Betting Sector Braced for Uncertainty Amid D.C. Political Climate
The recently passed tax bill, known as the One Big Beautiful Bill Act, is set to significantly impact the gambling sector, particularly in relation to sports betting. Here's a breakdown of the key changes and their potential consequences.
Starting January 1, 2026, the Internal Revenue Service (IRS) will only allow a deduction of up to 90% of gambling losses against winnings, a marked decrease from the previous 100% allowance. This change means that even if a gambler breaks even, they will still be liable for taxes on a portion of their winnings, effectively creating "phantom income"[1][2][3].
The new tax rules are expected to have far-reaching effects on the sports betting industry. Professional gamblers could find their already thin profit margins eroded, potentially driving some out of business. Recreational bettors may face worse odds and fewer contests or big-money jackpots as operators adjust to maintain profitability. The volume of bets could decrease, prompting sportsbooks and casinos to adjust their offerings, possibly by widening margins through more risky bets such as same-game parlays[2].
States that have grown their online sports betting markets may need to explore new revenue streams as the industry's activity declines. This development could lead to a decline in the legal sports betting market, potentially driving bettors to unregulated offshore markets.
There have been attempts to reverse the change, but so far, Senate Republicans have blocked these efforts. The American Gaming Association (AGA) has released a statement in favour of the bill, which limits gambling deductions to 90%[3].
Michael Savio, a writer from Denver who covers the sports betting industry for Casino.com, has been reporting on these developments for over four years. Known for his involvement in sports betting, Savio's work focuses on providing accurate and easy-to-understand information for readers. However, this article does not provide any new news or updates about the sports betting industry.
It's important to note that the newly approved tax bill does not specify whether it applies to sports betting or prediction markets. The article also does not provide information about the role of the Commodity Futures Trading Commission (CFTC) or its potential involvement in these changes.
As we approach the implementation date of these new tax rules, it will be interesting to see how the sports betting industry adapts and evolves.
[1] IRS Publication 529 - Miscellaneous Deductions [2] Forbes: How The New Tax Law Could Impact Professional Gamblers [3] CNBC: Senate Republicans Block Efforts To Reverse Gambling Loss Deduction Change In Tax Bill
In light of the One Big Beautiful Bill Act, sports betting in Las Vegas and other regions may experience alterations due to the new policy-and-legislation, as the Internal Revenue Service (IRS) will only allow a deduction of up to 90% of gambling losses against winnings from January 1, 2026. This change could potentially lead to professional gamblers facing reduced profit margins and even business closures, while recreational bettors may encounter worse odds and fewer attractive contests. Moreover, the decline in sports betting activity, particularly in online markets, could lead to politics and general news coverage revolving around this industry shift.
