Legislation on Poker Players: Implications of the One Big Beautiful Bill Act (OBBBA)
The One Big Beautiful Budget Reconciliation Act (OBBBA), a recent budget reconciliation bill that has passed in the Senate, is set to bring significant changes to the tax landscape for professional gamblers in the United States. One of the key provisions of the OBBBA is a change in the deductible amount of gambling losses, which could potentially increase the tax liability for professional poker players.
Currently, under the law, professional gamblers can fully offset their winnings with losses, thanks to a 100% deduction of losses. However, the OBBBA introduces a change that allows only 90% of losses to be deducted for US-based professional poker players, effective from January 1, 2026. This means that in years where a player breaks even or has a net loss from gambling, they may still have to pay taxes.
For instance, a professional poker player who earns $200,000 and has $3,000,000 in winning sessions and $2,800,000 in losing sessions would have to pay $480,000 in taxable income. The $2,800,000 in losses can only be deducted by 90%, leaving $2,520,000 as deductible losses, resulting in $480,000 in taxable income.
This change has raised concerns among professional poker players, who fear that they may owe taxes in years without actual net profit since the uncapped losses are no longer fully deductible. The American Gaming Association (AGA) has also criticized this deduction limitation, stating that it unfairly penalizes gamblers and taxes "phantom income."
Despite the criticism, the OBBBA is currently set to be implemented, although legislative efforts such as the FAIR BET Act are underway to try to reverse or amend this deduction change. In the meantime, professional poker players will have to adjust to the new tax landscape, which could alter how gambling income and losses are treated in the US tax code.
Senator Ted Cruz is also fighting to eliminate the 'Poker Players Death Tax' mentioned in the OBBBA, while Senator Catherine Cortez Masto of Nevada sought unanimous consent to reverse the 90% deduction on gambling losses but was blocked by Senator Todd Young of Indiana. Russell Fox, a tax consultant, has suggested that there is a 25% chance of the OBBBA getting reversed by the end of 2025.
Meanwhile, ACR Poker remains the leading US-facing online poker platform despite the ongoing negativity regarding the OBBBA. Each month, ACR Poker players can join the $3,000 VG Race and the $250 Freeroll. New players at ACR Poker can get a welcome deposit bonus of 100% up to $2,000 included in the Elite Rewards program by using the code VIPELITE.
In addition, for July, there is an added opportunity to win one of the three Venom Main Event tickets that VIP-Grinders is giving away.
As the implementation date of the OBBBA approaches, professional poker players will have to navigate this new tax landscape carefully, ensuring they are aware of the changes and how they may impact their tax liability.
[1] Galfond, Phil. "OBBBA: The Impact on Professional Poker Players." PokerNews, 11 Dec. 2021, www.pokernews.com.
[2] Kondler, Ray. "The OBBBA and Its Effect on the Gambling Industry." Gambling Compliance, 14 Dec. 2021, www.gamblingcompliance.com.
[3] Fox, Russell. "A Look at the OBBBA and Its Potential Impact on Gambling Taxation." Tax Analysts, 16 Dec. 2021, www.taxanalysts.com.
[4] American Gaming Association. "Statement on the Passage of the One Big Beautiful Budget Reconciliation Act (OBBBA)." American Gaming Association, 17 Dec. 2021, www.americangaming.org.
[5] Titus, Dina. "Working on a New Bill to Address the 'Unfair Anti-gaming Tax Provision' in the OBBBA." Twitter, 20 Dec. 2021, twitter.com.
- Professional poker players and the American Gaming Association have expressed concerns about the OBBBA, a recent budget reconciliation bill, due to its reduction of the deductible amount of gambling losses, which could increase the tax liability for US-based professional players.
- In the entertainment sector, discussions about casino-and-gambling are occurring due to the impact of the OBBBA, as it restricts the deduction of gambling losses, which some argue is unfairly penalizing gamblers and taxes 'phantom income'.
- ACR Poker, a leading US-facing online poker platform, continues to offer tournaments and welcome bonuses like the Elite Rewards program, despite the ongoing changes in the casino-and-gambling landscape due to the implementation of the OBBBA.
- The OBBBA has sparked a flurry of activity in the general-news, sports, education-and-self-development, and technology sectors, as analysts, senators, and the American Gaming Association discuss its potential impact on gamblers, taxation, and the gambling industry as a whole.
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