Affects Of The New Gambling Tax Law

[kewlJ]

I find it fascinating that mickey is going to argue with me, instead of Dancer, about why Dancer says he'll retire at the end of the year. Dancer has stated it clearly and unequivocally a dozen times on his blog, and pretty much in every other post. He is retiring because of the tax laws. Not because he's limited in mobility. Not because he's worn out.

Because of the tax laws.

I haven't posted in this thread because as a table game advantage player, that plays anonymously (as most table game APs do), this has zero effect on me.

But I will say this: Dietz is wrong as he almost always is here. And what I mean by that is NO AP, playing rated, playing machines, as so many are now doing with slots, is going to retire because of this law. APs figure ways around things like this. And there are several ways around this that I think everyone recognizes and a couple that maybe some don't. Again NO AP is retiring because of this law!! Period.

I don't follow Bob Dancer. Don't read his blog or anything else. I am sorry to hear that he is having mobility issues. That kind of thing really makes life less fun and pleasurable for anyone. I don't wish that on even the worst KJ haters.

Dancer can say whatever he wants, but if he is retiring, it isn't strictly about this law. He is probably just ready to retire.

For Dietz, a guy who claimed to have spent 100 days a year in Vegas (haven't seen much mention of it this year), he seems to have very little clue about advantage play and advantage players. Of course he is a tout, so I guess no need to.

Now I will tell you...there is a member of this forum that claims to be a big winning table game player while playing rated, so he gets all the comps. IF his fairytale were true, this would be a problem for him. But since nothing about his story is true, he might just lose a bit more of his family money, getting those overvalued comps.

[MisterV]

I

I NO AP, playing rated, playing machines, as so many are now doing with slots, is going to retire because of this law. APs figure ways around things like this. And there are several ways around this that I think everyone recognizes and a couple that maybe some don't.

Name a few.

Would this work>

Claim $100K in winnings and @120K in losses...should be zero tax due, correct?

Or am I confused...(not the first time).

[kewlJ]

I

I NO AP, playing rated, playing machines, as so many are now doing with slots, is going to retire because of this law. APs figure ways around things like this. And there are several ways around this that I think everyone recognizes and a couple that maybe some don't.

Name a few.

Would this work>

Claim $100K in winnings and @120K in losses...should be zero tax due, correct?

Or am I confused...(not the first time).

You could NEVER do that. You could only claim losses up to the amount you won. (offset). So NO. unless that has changed which I am not aware of.

And I am not going to recommend anything. I don't want to be accused of recommending anything illegal to players. BUT really this law (part of the big beautiful bill wasn't it?) This new law is a nothing burger.

And how is it going to be enforced? IRS has been short staffed for years, decades. And that was before Elon Musk took a chainsaw to the agency. And before Trump is permanently laying off even more.

[MDawg]

It also burns UNKewlJ to no end that even more posters at WOV have in recent times been expressing back up for MDawg's winning ways. Aneurisms coming galore for the perennially UNKewl one....

[jdaewoo]

This retard is a closeted homosexual.

[DGenBen]

Here is the actual text of the tax change:

90% of losses is the change. Not 90% of winnings.

Here’s the big question though. Losses are limited to 90% of actual losses AND to the extent of winnings.

So does that mean losses can be written off at 90% of the actual amount up to the extent of winnings or up to the extent of winnings & then only 90%?

That makes a big difference & I’m not sure if anyone knows that for certain yet including the IRS & the people who wrote the bill,

SEC. 70114. EXTENSION AND MODIFICATION OF LIMITATION ON WAGERING LOSSES.
(a) In general. — Section 165 is amended by striking subsection (d) and inserting the following:
“(d) Wagering Losses. —
“(1) In general. — For purposes of losses from wagering transactions, the amount allowed as a deduction for any taxable year —
“(A) shall be equal to 90 percent of the amount of such losses during such taxable year, and
“(B) shall be allowed only to the extent of the gains from such transactions during such taxable year.
“(2) Definition.
Special rule. — For purposes of paragraph (1), the term ‘losses from wagering transactions’ includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.”
(b) Effective date. — The amendment made by this section shall apply to taxable years beginning after December 31, 2025.”

[DGenBen]

This is interesting here is what ChatGPT says (and also Druff says similiar) so if they are both correct this change will not be a huge deal,

What the law actually says

The statutory text is:

“For purposes of losses from wagering transactions, the amount allowed as a deduction … shall be equal to 90 percent of the amount of such losses during such taxable year, and shall be allowed only to the extent of the gains from such transactions.”

Key points in the wording:

The 90% factor comes first in the sentence (“shall be equal to 90 percent of the amount of such losses”).
The cap by gains comes second (“shall be allowed only to the extent of the gains”).


Interpretive principle:

The IRS usually interprets statutes in the order written unless there’s a clear reason to do otherwise.
So 90% haircut first, then capped by winnings is consistent with standard IRS interpretation practice.


2️⃣ Comparison with current law

Currently, § 165(d) allows full losses up to the amount of gains.
Nothing in the new law says “first cap by winnings, then reduce by 90%.”
If Congress had wanted the haircut to apply after capping by winnings, they probably would have written it that way explicitly.

3️⃣ Areas of uncertainty

IRS guidance hasn’t been issued yet (as of October 2025). They could issue regulations clarifying the order.
Some tax practitioners might argue the 90% should only reduce what’s “allowed” after capping by gains, especially if challenged in court.
But based on normal statutory interpretation, your example (apply 90% first, then cap by gains) is the most defensible and likely reading.

✅ Summary

Confidence: High, but not 100% until IRS issues regulations.
Likely treatment by IRS: 90% of losses calculated first, then limited by winnings.

Media confusion: Comes from interpreting “to the extent of gains” as possibly coming first — understandable, but less consistent with the text.

[kewlJ]

That makes a big difference & I’m not sure if anyone knows that for certain yet including the IRS & the people who wrote the bill,

Here is the problem right there. Nobody including Senators and congress people even knew this was in "the big beautiful bill". Which tells you they and their staff didn't even read it....just pushed it through on behalf of some VERY special interest folks. And in the days/weeks after, when it was brought to their attention, I heard a number of Senators/Congressmen say that it would be "fixed" at a later time.

And 6 months later it has not been. And why would it be? There is no VERY special interest group pushing for it on behalf of gamblers. And these folks on both sides of the aisle that can't even keep the government functioning, aren't going to get to this any time soon, without "incentive" (special interest money) to do so.

The special interest group that should be concerned is the casino lobby. But I don't see them doing much. When this takes effect, recreational gamblers will be paying an extra tax on their losses. And they will just stop or reduce their gambling. Maybe that is when the casino lobby will take notice.

This whole situation was the result of one senator Mike Lee from Utah. You can bet he was paid handsomely with special interest money.

[DGenBen]

Precisely.

It was actually Sen, Mike Crapo from Idaho but as he is a mormon easy enough to confuse with Utah,

(Idaho also being the intellectual center of the USA for both tax & gambling policy)

He must be of high character because not only is he a Mormon, but he also has a DUI conviction so a man of principles.

If the two lawyers on here did anything except troll you, and write Mami stories about Tasha, they could provide their insights on the legal text.

But no one should hold their breath on that lol,

[kewlJ]

Precisely.

It was actually Sen, Mike Crapo from Idaho but as he is a mormon easy enough to confuse with Utah,

He must be of high character because not only is he a Mormon, but he also has a DUI conviction so a man of principles.

If the two lawyers on here did anything except troll you, and write Mami stories about Tasha, they could provide their insights on the legal text.

But no one should hold their breath on that lol,

Was it Crapo? I thought it was Lee. Either way, I am sure he made good money. And he is appropriately named.

Mormons are huge hypocrites. Half get drunk on a Saturday night. Half gamble in casinos. And some are closeted Homos, just like every other group. Not to mention multiple wives and adultery and all that shit. There is actually a pretty sizeable Mormon Population right here in Nevada and Las Vegas. Wonder why?

[DGenBen]

Yes it was definitely Crapo.

Because of Idaho’s position as a global financial powerhouse & center of American culture, tax policy, & economic thought, their senator gets to jam stuff in at the last minute that affects all Americans without any of the other 500+ members of congress even being aware of it,