Offshore Sportsbooks Win in Trump’s One Big Beautiful Bill

President Donald Trump is expected to sign the One Big Beautiful Bill Act into law Friday, finalizing a massive legislative package that touches everything from infrastructure to taxes.
The change could signal a desire for bettors to move back to offshore sportsbooks.

WASHINGTON – Buried deep in the bill (under Section 70114) is a change that directly affects American sports bettors. Starting in 2026, gamblers can only deduct 90% of their losses against their winnings on their federal tax return.

For anyone who does legal sports betting regularly (or even semi-seriously), this isn’t just an accounting technicality. It’s a seismic shift in how gambling profits (and losses) are treated, and it could cost bettors thousands of dollars, even in years when they don’t make a profit.

What’s Changing in 2026?

Under current law, gamblers can deduct 100% of their losses up to the total amount of their winnings. This means a break-even bettor doesn’t owe anything in taxes. Starting in 2026, however, only 90% of losses will be deductible, even if you itemize your deductions and keep detailed records.

Here’s how that changes things in practice:

Taxable Income Changes

Scenario	Winnings	Losses	Taxable Income (Pre-2026)	Taxable Income (New Law)
Break Even	$10,000	$10,000	$0	$1,000
Hot Streak	$25,000	$10,000	$15,000	$16,000
Rough Year¹	$30,000	$50,000	$0	$3,000
Pro	$300,000	$225,000	$75,000	$97,500

¹Because losses can only be deducted up to winnings; the 90% rule applies to the $30,000 loss cap, not full $50,000 in losses.

The results speak for themselves. A bettor who breaks even will now face a tax bill. Further, the more you win (and lose), the more you’ll have to pay in taxes, even though you didn’t make more money. And that’s before you even account for state taxes, which often mirror federal guidelines.

How to Stay Compliant Under the New Rules

For bettors sticking with legal online sportsbooks like DraftKings, FanDuel, or Caesars, the IRS expects meticulous documentation and full compliance.

Here’s how to approach it:

Report all winnings on your Form 1040, Schedule 1 (Line 8).
Only deduct losses on Schedule A if you itemize, and only up to 90%.
Keep detailed records: transaction logs, sportsbook statements, bank activity, and betting slips.
Don’t rely on the standard deduction. You’ll need to itemize to claim any losses at all.
Consult a tax professional if your annual betting activity is more than just a hobby.

Is There a Smarter Option? Offshore Books Gaining Attention

As the new tax rules loom, many experienced bettors are reevaluating their mobile betting apps and a growing number are looking back offshore.

Websites like BetOnline, Bovada, and MyBookie have decades of experience serving U.S. customers. These platforms don’t issue W-2Gs or automatically report winnings to the IRS. That means players aren’t hit with unexpected “phantom income” tax bills simply because they had a break-even year.

In fact, high-volume bettors already cite several reasons for shifting offshore.

No automatic tax forms means greater control over when and how winnings are reported.
Higher limits and fewer restrictions, particularly for college prop betting and live in-game wagers.
Crypto-friendly deposits and withdrawals, offering fast, discreet transactions.
Nationwide access, with no restrictions based on your state of residence.
Sportsbook bonuses and promos that are often more generous than U.S. books.

For those looking to stay profitable, or simply avoid paying sports betting taxes on wagers they didn’t profit from, offshore sportsbooks may not just be an alternative. They may be the smarter choice.

The One Big Beautiful Bill may be a political win for Trump and congressional Republicans, but for sports bettors, it’s a potential minefield. By taxing what were once deductible losses, the federal government is treating betting like a one-way street: heads they win, tails you still pay.

While states with legal sports betting had appeal from (often overbearing) regulators, the math under this new law is enough to make serious bettors rethink their game plan. Offshore platforms, with their low-friction experience and reporting flexibility, are suddenly back in style… and in 2026, they might be the smartest move on the board.

Advertising Disclosure

In order to provide you with the best independent sports betting news and content LegalSportsBetting.com may receive a commission from partners when you make a purchase through a link on our site.

Michael Molter

After spending time scouting college basketball for Florida State University under Leonard Hamilton and the University of Alabama under Anthony Grant, Michael started writing focused on NBA content. A graduate of both schools, he now covers legal sports betting bills, sports betting revenue data, tennis betting odds, and sportsbook reviews. Michael likes to play basketball, hike, and kayak when not glued to the TV watching midlevel tennis matches.