Yes — and it’s worse than most bettors realize. The new one big beautiful bill gambling tax has massive implications for players across the country. The One Big Beautiful Bill Act, signed by President Trump on July 4, 2025, caps gambling loss deductions at 90% of winnings starting January 1, 2026. That means break-even bettors now owe taxes on money they never actually made.
The Quick Version
- What changed: You can now only deduct 90% of gambling losses against 100% of gains — down from the previous 100% deduction (effective January 1, 2026)
- Who gets hit: Every U.S. bettor who itemizes deductions, including offshore players self-reporting on Bovada, BetOnline, or MyBookie
- The “phantom income” problem: Win $100K and lose $100K? You’re taxed on $10K of income that doesn’t exist
- Rollback effort: Rep. Dina Titus (NV-1) is pushing a reversal bill, and AGA wants the provision revisited
- Offshore angle nobody’s covering: No W-2G forms from offshore books means self-reporting under these new rules is a minefield.
How Does the One Big Beautiful Bill Gambling Tax 90% Loss Deduction Work?
Under the old rules, the math was clean. Win $100K, lose $100K, deduct the full $100K — taxable gambling income: zero. Made sense.
Not anymore.
The One Big Beautiful Bill slashed that deduction to 90%. I’ve been tracking tax legislation for six years, and this is one of the most quietly brutal provisions I’ve seen buried inside a massive bill. Here’s what the numbers actually look like as of June 2026:
Read that middle row again. You LOST ten grand on the year and the IRS wants tax on $11K of income. That’s really absurd. Phil Galfond — a pro poker player who’s won millions live and online — put it bluntly: “You can’t be a professional gambler in the U.S. if this goes through.” It went through.
The taxable phantom income on that $200K scenario is double what a winning bettor would owe under the old law. At a 24% federal bracket, that’s an extra $24,000 in taxes on money you never pocketed.
What Does This Mean for Offshore Bettors on Bovada and BetOnline?
Here’s the angle nobody in mainstream media is touching. Every ESPN article and TurboTax explainer assumes you’re betting on regulated, domestic sportsbooks that issue W-2G forms when you hit a threshold. But if you’re placing bets on Bovada or BetOnline? No W-2G is coming.
Offshore sportsbooks don’t report to the IRS. Period. That’s been the case forever, and it hasn’t changed under this bill.
What HAS changed is the math when you self-report — and yes, you’re legally required to self-report all gambling income regardless of source. I called two CPAs who specialize in gambling taxation last month. Both said the same thing: the 90% cap makes accurate record-keeping dramatically more important for offshore bettors, because you need to prove your losses to claim even the reduced deduction.
If you’re betting with crypto through an offshore book, your paper trail looks like this: blockchain transaction records, your sportsbook account history (screenshot everything), and whatever records you keep personally. The IRS isn’t getting a neat W-2G from MyBookie. You’re building that documentation yourself.
The 90% cap punishes high-volume bettors the hardest — and offshore bettors tend to be exactly that demographic.
Does the One Big Beautiful Bill Gambling Tax Push Bettors to Offshore Sportsbooks?
Rep. Dina Titus, who represents Las Vegas in Congress, warned this provision “pushes people into the black market.” She’s interested in drafting a rollback bill, per Fox59 reporting from June 2026. The American Gaming Association praised the overall bill but publicly stated they want to “address the changes to wagering deduction losses.”
But here’s my contrarian take: this law might actually push people offshore for a different reason than Titus means. Regulated sportsbooks report your winnings automatically. W-2Gs. 1099s. The IRS knows exactly what you won. Under the new 90% cap, that automatic reporting creates a tax trap — your wins are fully visible, but your deduction is artificially capped.
Offshore books don’t report anything. I’m NOT saying that makes it okay to skip self-reporting — it doesn’t. But the incentive structure just got worse for staying on the regulated side. That’s a policy failure, and I tracked this bill through three committee markups watching nobody raise this point.
Platforms like BetOnline and Bovada already handle crypto payouts that are harder for the IRS to trace than domestic bank wires. We’ve covered the offshore betting surge driven by promo restrictions before — this tax change pours gasoline on that fire. When you make the tax consequences worse AND leave an easy alternative sitting right there, don’t act surprised when the handle shifts.
Bottom line: the 90% cap creates a perverse incentive that benefits offshore sportsbooks at the expense of the regulated market the AGA spent a decade building.
Will the One Big Beautiful Bill Gambling Tax Be Reversed?
Maybe. House lawmakers are reportedly considering legislation to reverse the gambling loss deduction change, according to Fox59’s June 2026 reporting. Titus has the most skin in the game — her district IS Las Vegas. The AGA is lobbying quietly.
But I wouldn’t hold my breath. I’ve watched enough “fix-it” bills die in committee to know the timeline here. The earliest realistic window for a rollback vote is late 2026, and that’s optimistic. This provision generates revenue for the federal government — roughly $1.35 billion over ten years per CBO estimates — and killing revenue generators in an election cycle is a tough sell.
For now, the 90% cap is the law. We’re tracking every development on our gambling legislation tracker — but plan accordingly in the meantime.
What Should Bettors Actually Do Right Now?
Three moves. First — start keeping meticulous records of every bet, win, and loss. Dates, amounts, platforms. If you’re on Bovada or BetUS, export your transaction history quarterly. Screenshot it. Back it up.
Second — talk to a CPA who understands gambling income. Not your cousin who does taxes at H&R Block. Someone who knows the difference between a professional gambler filing Schedule C and a recreational bettor itemizing on Schedule A. The 90% cap hits both categories, but the strategies differ.
Third — read our online gambling strategies guide and think seriously about bankroll management. The tax math just changed. Your bet sizing and risk tolerance should change with it.
The era of “break even and owe nothing” is over as of January 1, 2026.
Frequently Asked Questions
The One Big Beautiful Bill Act, signed July 4, 2025, limits gambling loss deductions to 90% of winnings starting January 1, 2026. Previously, bettors could deduct 100% of losses against gains. The 10% gap creates taxable “phantom income” even for break-even or net-losing bettors.
Yes — any U.S. taxpayer who self-reports gambling income is subject to the 90% cap regardless of where they placed bets. Offshore sportsbooks like Bovada and BetOnline don’t issue W-2G forms, but the tax obligation and the reduced deduction still apply to income reported on your return.
Absolutely. The IRS treats cryptocurrency gambling winnings as taxable income. Whether you received a Bitcoin payout from an offshore sportsbook or cashed out in USDT, you’re required to report it at fair market value on the date received. The 90% loss deduction cap applies to crypto gambling income the same as cash.
House lawmakers are considering a rollback bill as of June 2026, and Rep. Dina Titus (NV-1) has expressed interest in drafting reversal legislation. The AGA has also called for revisiting the provision. No bill has been formally introduced yet.
The 90% cap on gambling loss deductions took effect January 1, 2026, per the One Big Beautiful Bill Act signed into law on July 4, 2025.
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