Will they adjust pay tables in 2026?

[MisterV]

My log book:

I write down the date and name of the casino.

Then for each session I have two entries: money out and money in.

Typically I start each session at $200.00; if I've any left or if I won I list the remaining amount, otherwise, as usual, I write "zero."

At the end of the trip I subtract money out from money in to see if I've a net profit or loss, then I do the math to calculate the total win or loss for the trip.

That number is added or subtracted from my running total, which I began somewhere around the end of the last century.

FWIW lifetime I am now down about $72K.

While I've never been audited I suspect I could pass inspection.

[kewlJ]

My log book:

I write down the date and name of the casino.

Then for each session I have two entries: money out and money in.

Typically I start each session at $200.00; if I've any left or if I won I list the remaining amount, otherwise, as usual, I write "zero."

At the end of the trip I subtract money out from money in to see if I've a net profit or loss, then I do the math to calculate the total win or loss for the trip.

That number is added or subtracted from my running total, which I began somewhere around the end of the last century.

FWIW lifetime I am now down about $72K.

While I've never been audited I suspect I could pass inspection.

In addition to the info you stated, you are supposed to record a machine or table number. can you imagine that? Nobody would ever do that. In all the days in a casino, I have never seen any player pull out a little notebook and record the number on the side of a machine or on a table. hell on table games, sometime the table number is on the side of the table facing the dealer and pit. Players can't even see it without asking.

That is just the IRS making for a little jumping through hoops.

[MDawg]

Get help.

You are a fascinating person in a lot of ways but it has nothing to do with your gambling.

[jdaewoo]

This retard is a closeted homosexual.

[DGenBen]

I'm trying to lay low because I claim I died in another thread but well ... I lied. Shhhhhh. No one likes a liar.

Regarding slot degens - they may not be rational actors but when tax season comes along and you're already in debt on CCs and living paycheck to paycheck like your basic degenerate with little self control then you're going to have to come up with that money. It'll sting. The entertainment aspect is gone. THere is no current gambling high working against the pain of paying. All you know is you owe $1000 on money you already lost. You could have lost $50k and owe the tax man $30k. You know how the numbers work. It really is a crazy thing. Casino industry would help themselves taking a more holistic approach to that with PENNY SPINS !

I really suspect W2-Gs are more sigifcant reason people stop gambling than you realize. When you had to pay a tax on money you lost?...

Speaking of slots. In my state there are bars that basically based around slots. It is crazy. My parents were both hospitalized so I'm spending a lot of time at their house outside of the basement. So I've been to their neighborhood bar. Most of the women smoke and 80% are considerably overweight. Instead of going to LV and losing $500-$1k they lose $100 every night of the week... I used to want to get into that business but didn't have the capital. Geez the owner must kill it. These people going to be a burden on healthcare and need government help when they can no longer work. As trump would say piggy piggy piggy.

My main point was losing gamblers do not pay taxes on money they lost.

When you have a W2G(s)and you lost on gambling for the year the W2G(s) is issued you do not pay taxes on that W2G(s).

Even with the 90% loss deduction cap coming next year it will not affect most recreational gamblers.

It will look something like this for most rec gamblers:

Total 2026 W2Gs $20,000.

Total 2026 actual losses: $25,000 total. Actual losses with 90% deduction cap adjustment = max deduction adjustment $22,500

Gambling losses can only be deducted to the extent of wins so $20,000 of wins is written off with $22,500 of losses but capped at the win amount so $20,000 worth of wins is capped at $20,000 of losses.

So $20,000 of wins offset with $20,000 of losses is 0 taxable gambling income,

Like I mentioned it may screw up some peoples standard deduction or Adjusted gross income causing them to pay more, but as little as people understand gambling math, they understand tax math even less so I wouldn’t be surprised if the percentage of recreational players that stops gambling due to tax laws is close to 0%.

I may of course be wrong.

The casino lobby has enormous political power & they haven’t made an issue over taxes so they apparently don’t see it as a problem.

If it becomes a problem & casinos start losing business then the casino lobby will almost certainly exert political pressure to make changes.

Interesting. I haven't followed this issue all that much as machine play has become such a tiny part of what I do. I was thinking of getting into some advantage slot play this summer and mickey directed me to some videos to pick up some stuff, but I sort of soured on the idea pretty quickly for a variety of reason.

But I know gamblers were up in arms about this 90% thing as soon as they realized it had been snuck into the big beautiful bill back in the spring. So up in arms that they contacted their senators and congresspeople who didn't seem to know about it until after the fact. And the immediate response from the coverage and uproar from both sides of the aisle, was that they would pass a "fix" before the end of the year. Well here we are at the end of the year and it doesn't look like any "fix" will be passed or is even been discussed.

If what you say is true and I haven't looked into it, nor have any reason to doubt you, then I don't think it matters. You just offset your W-2 with a little higher losses if need be to cover the 90% instead of 100%. I mean the government doesn't accept W/L statements anyway. Oddly they accept a players own W-L handwritten logs and lets be honest, a player can make them say whatever he wants. Not that I ever did that. (where is the angel emoji).

Am I missing something?

Nope, you pretty much nailed it.

Although adjusting your losses to offset the 90% & get it back to 100% would generally not be legal but defining your sessions in a way that is most advantageous to your loss & win totals or avoiding taking thin plays with a lot of variance would be a legal method to accomplish a similar result.

The people who were most up in arms about it were professional high limit tournament poker players because tournament results are published and there is very little ambiguity about total wins & losses from larger tournaments.

However most poker players also play cash games & these are not tracked so then it falls back upon them to self report, keep a gambling log, and define sessions.

Also congress is too divided now to do anything about this so most people have sort of accepted this is going to be the way it is, at least in the short term.

People from both sides of aisle made some half hearted attempts to change it back but those pretty much died on the vine.

[DGenBen]

I would put the number of recreational gamblers that keep a gambling logbook at somewhere between slim and none. I would think the first thing out of an accountant’s mouth after seeing a gambling W2G is “where’s your logbook?”

This is very true. Almost no rec gamblers keep a log book,

When I was a losing degenerate gambler I would only get 1 or 2 W2Gs a year. Each year I’d give them to whoever was doing my taxes that year, either an independent preparer or an HR Block type place and tell them I lost for the year.

They would just write it off. A couple times I asked about getting audited etc, & they would tell me the IRS understands that most slot players lose so they don’t waste time bothering with people that have one or two smallish W2Gs when they are not going to find additional tax revenue.

Professionals get a lot of W2Gs including some large ones but most don’t get bothered because they claim a win & pay taxes on it.

The only guy I know who got audited had a lot of W2Gs but try to report a loss when he actually was a winning player. He didn’t get in trouble (which I was kind of surprised about) but he had to redo his taxes & pay. He wasn’t a rec though, gambling was his only source of income so I think thats why he got audited,

[SLaPiNFuNK]

And you also have to remember that people that would generate a lot of W2gs playing slot machines that average 85-90% payback are not rational financial actors to begin with.

I'm trying to lay low because I claim I died in another thread but well ... I lied. Shhhhhh. No one likes a liar.

Regarding slot degens - they may not be rational actors but when tax season comes along and you're already in debt on CCs and living paycheck to paycheck like your basic degenerate with little self control then you're going to have to come up with that money. It'll sting. The entertainment aspect is gone. THere is no current gambling high working against the pain of paying. All you know is you owe $1000 on money you already lost. You could have lost $50k and owe the tax man $30k. You know how the numbers work. It really is a crazy thing. Casino industry would help themselves taking a more holistic approach to that with PENNY SPINS !

I really suspect W2-Gs are more sigifcant reason people stop gambling than you realize. When you had to pay a tax on money you lost?...

Speaking of slots. In my state there are bars that basically based around slots. It is crazy. My parents were both hospitalized so I'm spending a lot of time at their house outside of the basement. So I've been to their neighborhood bar. Most of the women smoke and 80% are considerably overweight. Instead of going to LV and losing $500-$1k they lose $100 every night of the week... I used to want to get into that business but didn't have the capital. Geez the owner must kill it. These people going to be a burden on healthcare and need government help when they can no longer work. As trump would say piggy piggy piggy.

My main point was losing gamblers do not pay taxes on money they lost.

When you have a W2G(s)and you lost on gambling for the year the W2G(s) is issued you do not pay taxes on that W2G(s).

I wish that were the case. If you are self employed and don't write yourself paychecks, you are most certainly taxed on every W2G even if you lose. It counts towards your gross income. I show additional income for each W2G received.

[MisterV]

I wish that were the case. If you are self employed and don't write yourself paychecks, you are most certainly taxed on every W2G even if you lose. It counts towards your gross income. I show additional income for each W2G received.

Really?

I was self-employed and gambled for several decades with many W2-G's and I avoided paying taxes by itemizing.

You know: declare the total yearly winnings on form 1040 but subtract total yearly losses as an itemized deduction on Schedule A.

But yes, total winnings are considered part of your "gross income" albeit subject to set-off against losses.

[accountinquestion]

I'm trying to lay low because I claim I died in another thread but well ... I lied. Shhhhhh. No one likes a liar.

Regarding slot degens - they may not be rational actors but when tax season comes along and you're already in debt on CCs and living paycheck to paycheck like your basic degenerate with little self control then you're going to have to come up with that money. It'll sting. The entertainment aspect is gone. THere is no current gambling high working against the pain of paying. All you know is you owe $1000 on money you already lost. You could have lost $50k and owe the tax man $30k. You know how the numbers work. It really is a crazy thing. Casino industry would help themselves taking a more holistic approach to that with PENNY SPINS !

I really suspect W2-Gs are more sigifcant reason people stop gambling than you realize. When you had to pay a tax on money you lost?...

Speaking of slots. In my state there are bars that basically based around slots. It is crazy. My parents were both hospitalized so I'm spending a lot of time at their house outside of the basement. So I've been to their neighborhood bar. Most of the women smoke and 80% are considerably overweight. Instead of going to LV and losing $500-$1k they lose $100 every night of the week... I used to want to get into that business but didn't have the capital. Geez the owner must kill it. These people going to be a burden on healthcare and need government help when they can no longer work. As trump would say piggy piggy piggy.

My main point was losing gamblers do not pay taxes on money they lost.

When you have a W2G(s)and you lost on gambling for the year the W2G(s) is issued you do not pay taxes on that W2G(s).

I wish that were the case. If you are self employed and don't write yourself paychecks, you are most certainly taxed on every W2G even if you lose. It counts towards your gross income. I show additional income for each W2G received.

My taxes as a self-employed person seem to mean I can't write off the W2Gs. I enter it all into quicken and it tells the optimal way to file. Whether to itemize or not and even the year I had a few W2-Gs it made me pay taxes on them and taking the standard deduction. I don't know about other people's taxes. I have't been an employee in decades - only a contractor.

That being said is my understanding is if you ignore the W2Gs the IRS program just says you still owe the money and sends you a bill. I believe this has happened to me once. The whole system is absurd TBH. If you make a mistake you're not even made aware of what the mistake is. Perhaps you can investigate it somehow - I don't know but the IRS sure doesn't point it out.

[DGenBen]

As I said W2Gs can screw up your deductions and your total gross income which can result in you paying more in taxes than you would have without the W2Gs due to losing standard deductions or being placed in a higher tax bracket.

But if you are a net losing gambler for the tax year & you are filing your taxes correctly or your tax pro is filing them correctly, the income itself from from the W2G(s) can be fully written off by your losses,

So as a rule you aren’t just taxed because you had a W2G(s) during a losing year, that was my point.

You would only be taxed directly for a W2G(s) in losing years if you either didn’t know better than to write it off, or if there was something particular to your own specific tax situation where it was more advantageous to just take the hit,

[accountinquestion]

As I said W2Gs can screw up your deductions and your total gross income which can result in you paying more in taxes than you would have without the W2Gs due to losing standard deductions or being placed in a higher tax bracket.

But if you are a net losing gambler for the tax year & you are filing your taxes correctly or your tax pro is filing them correctly, the income itself from from the W2G(s) can be fully written off by your losses,

So as a rule you aren’t just taxed because you had a W2G(s) during a losing year, that was my point.

You would only be taxed directly for a W2G(s) in losing years if you either didn’t know better than to write it off, or if there was something particular to your own specific tax situation where it was more advantageous to just take the hit,

Yea, I don't really understand the terminology. Clearly you understand it better than me. I have a company where I just take the profits so it is all basic self-employment pay. I have a schedule X (whatever letter) that has my business write-offs/expenses/profits for my LLC (single member/pass-thru taxes) but my personal write-offs use the standard deduction. My understanding is to write-off the W2-Gs then I can no longer use the standard deduction. And so Quicken has always had me eat the W2-Gs. If I ignore them then the IRS just bills me later. I know I'm repeating myself but I must be in the something particular category. Is that simply because I'm not an employee?

I'm not sure what category I fall into and would love to understand that if quicken has been giving me bad advice. I just fill out the various forms on quicken and it tells me the best way to do it.

Man taxes are a bitch. Not just paying them but the complexity and everything else. fuck

I always thought about hiring someone but I still have to gather up everything and blah blah. By the time I have it gathered up to give to an accountant then I might as well just buy Quicken for $90 and enter it there...

[DGenBen]

As I said W2Gs can screw up your deductions and your total gross income which can result in you paying more in taxes than you would have without the W2Gs due to losing standard deductions or being placed in a higher tax bracket.

But if you are a net losing gambler for the tax year & you are filing your taxes correctly or your tax pro is filing them correctly, the income itself from from the W2G(s) can be fully written off by your losses,

So as a rule you aren’t just taxed because you had a W2G(s) during a losing year, that was my point.

You would only be taxed directly for a W2G(s) in losing years if you either didn’t know better than to write it off, or if there was something particular to your own specific tax situation where it was more advantageous to just take the hit,

Yea, I don't really understand the terminology. Clearly you understand it better than me. I have a company where I just take the profits so it is all basic self-employment pay. I have a schedule X (whatever letter) that has my business write-offs/expenses/profits for my LLC (single member/pass-thru taxes) but my personal write-offs use the standard deduction. My understanding is to write-off the W2-Gs then I can no longer use the standard deduction. And so Quicken has always had me eat the W2-Gs. If I ignore them then the IRS just bills me later. I know I'm repeating myself but I must be in the something particular category. Is that simply because I'm not an employee?

I'm not sure what category I fall into and would love to understand that if quicken has been giving me bad advice. I just fill out the various forms on quicken and it tells me the best way to do it.

Man taxes are a bitch. Not just paying them but the complexity and everything else. fuck

I always thought about hiring someone but I still have to gather up everything and blah blah. By the time I have it gathered up to give to an accountant then I might as well just buy Quicken for $90 and enter it there...

Yeah not familiar with a situation where you are self employed & also gamble but I wouldn’t be surprised if you reached out to a tax pro that there is something where you can write off losses against the W2Gs, I don’t see why you have to eat them completely just because you’re self employed.

But then again, I’m not familiar with your situation so maybe you do. And as I mentioned they are known to screw up standard deductions. That only changed with the 2017 tax changes I believe.

Funny side note, had a friend recently ask me “Why don’t I see any input field on Turbo Tax for my gambling dairy?” Had to tell him you only input the final results the diary is just for audit.

[MisterV]

Of course you can write them off...just itemize.

[accountinquestion]

As I said W2Gs can screw up your deductions and your total gross income which can result in you paying more in taxes than you would have without the W2Gs due to losing standard deductions or being placed in a higher tax bracket.

But if you are a net losing gambler for the tax year & you are filing your taxes correctly or your tax pro is filing them correctly, the income itself from from the W2G(s) can be fully written off by your losses,

So as a rule you aren’t just taxed because you had a W2G(s) during a losing year, that was my point.

You would only be taxed directly for a W2G(s) in losing years if you either didn’t know better than to write it off, or if there was something particular to your own specific tax situation where it was more advantageous to just take the hit,

Yea, I don't really understand the terminology. Clearly you understand it better than me. I have a company where I just take the profits so it is all basic self-employment pay. I have a schedule X (whatever letter) that has my business write-offs/expenses/profits for my LLC (single member/pass-thru taxes) but my personal write-offs use the standard deduction. My understanding is to write-off the W2-Gs then I can no longer use the standard deduction. And so Quicken has always had me eat the W2-Gs. If I ignore them then the IRS just bills me later. I know I'm repeating myself but I must be in the something particular category. Is that simply because I'm not an employee?

I'm not sure what category I fall into and would love to understand that if quicken has been giving me bad advice. I just fill out the various forms on quicken and it tells me the best way to do it.

Man taxes are a bitch. Not just paying them but the complexity and everything else. fuck

I always thought about hiring someone but I still have to gather up everything and blah blah. By the time I have it gathered up to give to an accountant then I might as well just buy Quicken for $90 and enter it there...

Yeah not familiar with a situation where you are self employed & also gamble but I wouldn’t be surprised if you reached out to a tax pro that there is something where you can write off losses against the W2Gs, I don’t see why you have to eat them completely just because you’re self employed.

But then again, I’m not familiar with your situation so maybe you do. And as I mentioned they are known to screw up standard deductions. That only changed with the 2017 tax changes I believe.

Funny side note, had a friend recently ask me “Why don’t I see any input field on Turbo Tax for my gambling dairy?” Had to tell him you only input the final results the diary is just for audit.

Yea, I basically just trust Quicken more than a random accountant. There are tremendous resources put into the program every year and it should get something like this right. Basically if I itemize I lose the standard deduction. It was my assumption this is the case for everyone. Interesting...

So you can itemize and write things off and still keep the standard deduction? it isn't always just one or the other? Maybe I give them the llc's EIN instead of my ssn? bahaha

Of course you can write them off...just itemize.

Yes you are right but if I pay more doing it that way then are they really "written off" ?? Use your brain. thanks

[DGenBen]

Yea, I don't really understand the terminology. Clearly you understand it better than me. I have a company where I just take the profits so it is all basic self-employment pay. I have a schedule X (whatever letter) that has my business write-offs/expenses/profits for my LLC (single member/pass-thru taxes) but my personal write-offs use the standard deduction. My understanding is to write-off the W2-Gs then I can no longer use the standard deduction. And so Quicken has always had me eat the W2-Gs. If I ignore them then the IRS just bills me later. I know I'm repeating myself but I must be in the something particular category. Is that simply because I'm not an employee?

I'm not sure what category I fall into and would love to understand that if quicken has been giving me bad advice. I just fill out the various forms on quicken and it tells me the best way to do it.

Man taxes are a bitch. Not just paying them but the complexity and everything else. fuck

I always thought about hiring someone but I still have to gather up everything and blah blah. By the time I have it gathered up to give to an accountant then I might as well just buy Quicken for $90 and enter it there...

Yeah not familiar with a situation where you are self employed & also gamble but I wouldn’t be surprised if you reached out to a tax pro that there is something where you can write off losses against the W2Gs, I don’t see why you have to eat them completely just because you’re self employed.

But then again, I’m not familiar with your situation so maybe you do. And as I mentioned they are known to screw up standard deductions. That only changed with the 2017 tax changes I believe.

Funny side note, had a friend recently ask me “Why don’t I see any input field on Turbo Tax for my gambling dairy?” Had to tell him you only input the final results the diary is just for audit.

Yea, I basically just trust Quicken more than a random accountant. There are tremendous resources put into the program every year and it should get something like this right. Basically if I itemize I lose the standard deduction. It was my assumption this is the case for everyone. Interesting...

So you can itemize and write things off and still keep the standard deduction? it isn't always just one or the other? Maybe I give them the llc's EIN instead of my ssn? bahaha

Of course you can write them off...just itemize.

Yes you are right but if I pay more doing it that way then are they really "written off" ?? Use your brain. thanks

Reminded me of “The Quicken” scene from Breaking Bad lol.

[MisterV]

Yes you are right ...thanks

Oh, you already KNEW of the option?

OK, you can get back to standing on your head now.

btw..."Chief Goofball?"

Really, is that the best your wormy brain could come up with?

[Dan Druff]

Here's some posts I made on 2+2 about these matters, which some of you might enjoy.....

----

I've been posting about this on X, and most people are angry at me because I'm not riding the outrage and doom-and-gloom train.

It's much easier to join the screaming crowd and post, "OMG!! EXISENTIAL THREAT TO PRO POKER AND SPORTSBETTING!! UNFAIR!!! NO GOOD!! THIS MUST BE REPEALED!! CALL YOUR CONGRESSMAN!! COME ON EVERYONE LET'S FIGHT!!!"

Posts like that mean nothing, and accomplish nothing.

Here's some realities, whether you like them or not. I can speak these realities from 25+ years involvement in the poker / sportsbetting / casino advantage play communities. As a disclaimer, note that I am NOT advocating you cheat on your taxes, but rather am discussing what I've observed in the gambling communities for the past 25 or so years. As a second disclaimer, I am not a tax professional and this is not tax advice. It's just the observations of an idiot on a forum.


1) Dina Titus' FAIR Act to negate this change is a nice bill, but it's not going anywhere. Titus has zero influence. Everything she tries fails. You don't get an A for effort in Congress. The best bill in the world is useless if it doesn't pass. She is not going to rescue you. This new tax law is going to take effect on 1/1/26 whether you like it or not.

2) This will not end professional gambling as we know it. In fact, the gambling/poker/sportsbetting landscape will look very similar a year from today, compared to right now. Go ahead and screenshot this post, and show it to me on 12/4/26 if you want to rub it in my face that I'm wrong, but I'm reasonably sure I'll be right.

3) This only affects a small percentage of players. If you don't itemize, you're not affected. If your total net losing SESSIONS (note the word sessions) are 11% or more greater than your total net winning sessions, this will not affect you.

4) Playing offshore online poker is not going to save you. This is because you are expected to pay income tax on ALL income, not just US-derived income. Sure, some people don't declare offshore income, but that's cheating on your taxes. And if you're going to cheat on your taxes like that, then you'd also likely be willing to simply pad 11% fake losses onto your actual number, which would negate this law. It is bizarre how people clutch pearls and say "OMG I WOULD NEVER DECLARE FAKE LOSSES", yet claim they'll play offshore to dodge this law. It's like saying you wouldn't ever shoplift because you're a good person, so instead you're going to run email phishing scams.

5) Casino advantage players will definitely not be affected. There is no reliable tracking of their wins and losses, as they typically play on multiple players cards (many not in their own names), as well as often with no card at all. Their wins/losses on their taxes are completely self-reported and unverifiable beyond a very rough number. I can assure you that very few casino APs report their actual winnings to the IRS. Most report a number they feel they can get away with defending if audited. So these people will just tack on another 11% of losses, and the new law will be negated. There will be no proof they did this, in most cases.

6) Live cash poker players are similar. You can pretend we live in a perfect world where live cash poker players accurately report their winnings to the IRS, but most don't. Again, they will simply tack on another 11% of "losses" and nobody will be the wiser.

7) Sessions matter, and most people don't understand them. The 90% loss deduction limit only matters for losing sessions against winning sessions, NOT within the same session. If you're in the same session, you can deduct 100% of losses. For example, if you win $100k in a tournament, and then walk over to the blackjack table and donk it all off, you have broken even. You wouldn't have any tax liability for this day, because it's all the same session. The IRS has never defined a "session" with specifics, so players can define their own sessions by whatever is most advantageous for them, and as long as it's somewhat reasonable (you can't say the year is one long session), then it will typically pass an audit. This will be a huge legal tool to combat this new law.

8) The law on the books is one thing, and enforcement is another. I have serious doubts that the IRS is going to come after breakeven players who declare zero gambling income, even if the law states they owe taxes for nonexistent wins. Remember, this is all self-reported, and very few gamblers have historically been audited. In fact, there's gamblers I've known over the years whom I was sure would get audited (like one guy who made millions in cash games and didn't file a return for 5 years straight), but somehow they never did. So the enforcement might be very light, if at all.

9) People will probably start creating phony losses to negate this, if necessary. For example, the tournament-only player might start claiming he's also playing live cash and losing a bunch of money, and include those fake "losing sessions" in his losses calculation, until it brings down his total liability 11% (and negates the new law). This will be tough for the IRS to prove. Typically the way they prove tax evasion is showing that you have far more wealth/assets/deposits/cash than your returns claim you should have. For example, if I claim to have made no more than $100k per year for the past 20 years, and I buy a $10m house in cash today, that would be very suspicious to the IRS. They might haul me in and ask how I had $10m cash to buy this house, if my returns show I haven't made anywhere near $10m lifetime. But the tournament player claiming additional cash losses that offset his overall tournament winnings probably wouldn't be questioned. Again, I am not advocating doing things like this, and I always file my own taxes legally. I'm just saying it's going to happen, and therefore these people will keep playing despite all of their claims that it makes their career unviable.

10) Take #9 and apply it to pretty much any other form of gambling (sportsbetting, for example), and you'll see that a lot of people are going to keep on with their pro gambling careers, and just adjust what they claim to the IRS. You're not going to have a mass quitting of pros who go work regular jobs, nor are you going to have many people actually sending money to the IRS to pay taxes on a breakeven or slightly losing year.


When I point stuff out like the above, I get a lot of pearl-clutching and stupid responses:

"OMG how can you advocate tax cheating? I thought you're the anti-fraud guy!" ---- I'm not advocating this, but I know my fellow gamblers, and I'm telling you what many are going to do.

"Why are you defending this new law? Stop it! Join our fight instead of telling us it's not a big deal!" ---- I'm not defending the new law. It sucks, and I hate it. But this is not going to have the gigantic impact on the game that people think it will.

"Sessions don't matter! You can only deduct 90% of losses from winnings! Period!" --- Nope, you're wrong.

"There's a cap of 90% deduction from winnings. You don't know what you're talking about!" --- Nope, there is no cap in the new law. The only change involves taking your total losing sessions and multiplying that number by 0.9 before subtracting it from winnings, for tax calculations.

"The IRS is going to see everything from now on and send me a big tax bill!" --- Nope, this is self-reported. You will only have to defend your numbers when you get audited, so keep that in mind no matter what you choose to do.

[Dan Druff]

Another post....

----

This is a rumor reported by VitalVegas (Scott Roeben), who tends to be pretty good regarding accuracy. People bring him rumors and he reports them, and from what I've seen, most of the time they turn out to be true.

Embedded Tweet

https://twitter.com/#!/x/status/1997404043971543153

So what does this mean? Are the gambling CEOs, politicians, and IRS meeting so they can repeal this new law?

Sadly, no. "Resolution" does not equal "repeal". Resolution in this case means "clarification".

There are TWO gambling related tax issues which remain unresolved for 2026, and we are now less than 4 weeks away from the start of that year.

Issue #1 is the 90% loss deduction limit, as we've been discussing here. While the law is fairly clear, there remain lots of scary and unanswered questions. First, will they expect taxes to be paid on gambling "winnings" if the gambler loses or breaks even, but the 90% thing causes a phantom income for tax purposes? Second, what will the IRS expect of a gambling winner with high volume, to where the new law would induce a tax liability greater than their income? Third, what is defined as a session, for the purposes of this law?

Issue #2 is the new $2000 W2-G reporting threshold, which is getting relatively little attention. A law was changed to bring that threshold from $1200 (set in 1977, and still in effect in 2025) to $2000. The attempt was to make it $5000, but $2000 was the compromise. However, these dummies changed the wrong statute, so now we have it to where one says $2000 and the other says $1200.

Specifically, they changed the $600 threshold for general payments to $2000 (such as whether I have to give you a tax form if you buy a piece of me in the WSOP, and I pay you $1000 from my winnnigs). That's known as Section 6041(a). However, the $1200 W2-G law for casino machines (slots/video poker) was Section 3402(q), and that remains $1200.

The idiots meant to change 3402(q), and accidentally changed 6041(a). LOL!

So now there's a lot of confusion on the part of casinos, whether they issue W2-G forms for $1200 machine jackpots, or if they start at $2000 when January 1st arrives.



This gathering that VitalVegas is describing is a meeting where the IRS will be pressed to come up with specific guidance for both of the issues above, so people understand what the hell to expect for 2026.

Why is this good news?

It is very possible that the IRS will greatly soften the new 90% deduction of losses law. For example, they might issue guidance that those without a net win for the year still have $0 tax liability for their gambling. They might also issue guidance that there's a percentage cap for taxation of gambling income, regardless of the 90% loss limit. For example, they might state that you will never owe more than 35% of your net gambling winnings in taxes, no matter what taxable income number the 90% loss ends up generating. I'm just making these things up off the top of my head, so don't get too excited, but basically there might be more concrete guidance on all of this, even if the law itself is not repealed.

Of course, because X is full of morons, virtue signalers, and ignoramuses, nobody is paying attention to this important meeting (except VitalVegas, apparently), and everyone instead continues to clutch pearls.

[Dan Druff]

Another post from 2+2...

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Furthermore, as I mentioned before, there's the matter of enforcement.

I've been thinking about something. WHY was this law passed? WHY were they limiting 90% of losses against wins? How did anyone think this was fair?

We will likely never know the answer to this, but I'm guessing the discussion went something like, "Those professional gamblers, they've been getting away with underpaying their taxes for decades. They self-report and all of them are shaving off winnings! It's not fair to the rest of American taxpayers!" Then someone responded, "I know! Since all of them have to be cheating by at least 10%, let's just chop 10% off whatever losses they want to deduct! That will make it more equitable!"

Then these dummies didn't think about all of the negative side effects to this, most importantly the "phantom income" problem.

What's my point?

The IRS is never going to haul in a high volume grinder who clearly made no more than $200k in poker, and demand he pay taxes on a fake income of $1.18m, thus making his tax rate something like 300%. This would be a horrible look, and an embarrassment to the IRS and its top brass, and the media would eat it up.

I cannot see a realistic scenario where such a grinder would be brought into an audit and told to pay $600k taxes on $200k income, even if the law technically allows for that to happen. Much like they could be auditing the gambling community like crazy (and indeed would catch a lot of tax cheats), but they have been barely auditing gamblers at all, going back decades.

[mickeycrimm]

Another post from 2+2...

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Furthermore, as I mentioned before, there's the matter of enforcement.

I've been thinking about something. WHY was this law passed? WHY were they limiting 90% of losses against wins? How did anyone think this was fair?

We will likely never know the answer to this, but I'm guessing the discussion went something like, "Those professional gamblers, they've been getting away with underpaying their taxes for decades. They self-report and all of them are shaving off winnings! It's not fair to the rest of American taxpayers!" Then someone responded, "I know! Since all of them have to be cheating by at least 10%, let's just chop 10% off whatever losses they want to deduct! That will make it more equitable!"

Then these dummies didn't think about all of the negative side effects to this, most importantly the "phantom income" problem.

What's my point?

The IRS is never going to haul in a high volume grinder who clearly made no more than $200k in poker, and demand he pay taxes on a fake income of $1.18m, thus making his tax rate something like 300%. This would be a horrible look, and an embarrassment to the IRS and its top brass, and the media would eat it up.

I cannot see a realistic scenario where such a grinder would be brought into an audit and told to pay $600k taxes on $200k income, even if the law technically allows for that to happen. Much like they could be auditing the gambling community like crazy (and indeed would catch a lot of tax cheats), but they have been barely auditing gamblers at all, going back decades.

I think Crapo, typical politician, was just looking for a way to raise more tax revenue. I think it was estimated to be about 1 billion.