Senate Tax Proposal Raises Concerns for U.S. Poker Players

A new tax provision advancing in the U.S. Senate is causing alarm in the poker world. The measure would limit how much gamblers can deduct in losses, creating scenarios where players pay tax on income they never truly earned.

Under current federal law, gamblers can deduct losses up to the amount of their winnings. This ensures they are taxed only on actual profit. For poker players—whose results can fluctuate dramatically—this principle is essential.

The Senate amendment would cap deductible losses at 90% of winnings. That means if a player reports $100,000 in winnings and $100,000 in losses, they could only deduct $90,000. The remaining $10,000 would be taxable, despite the player breaking even overall.

Unlike games of pure chance, poker is a skill game with high variance. Professionals rely on large sample sizes to realize profit, often facing long periods of break-even or losses before hitting a big win.

Taxing gross winnings while limiting the ability to fully offset losses disrupts this model. Many fear it would make professional poker unsustainable in the U.S., reduce entries in major tournaments, and drive players toward unregulated offshore sites or even overseas relocation.

The poker community has reacted strongly. Prominent players and industry voices are urging lawmakers to reconsider, warning of the damage to a legal, regulated industry.

Representative Dina Titus of Nevada has spoken out against the measure, pledging to support a legislative fix that treats gambling income fairly. Meanwhile, tax professionals are debating whether the cap would apply only to recreational gamblers who itemize deductions or also to full-time professionals.

The amendment narrowly passed the Senate and must now be reconciled with the House version of the bill, which does not contain the cap. Its ultimate fate will depend on negotiations in Congress. If enacted, the new rule would take effect in 2026.

For poker professionals, the ability to deduct losses against winnings isn’t a loophole—it’s a basic recognition of net income. The proposed limit threatens that fairness, raising broader questions about how gambling should be taxed in the U.S.