- Fewer than 0.6% of U.S. sports bettors report gambling income to the IRS, and over 90% lose money annually.
- The proposed tax change targets high-stakes professionals, not casual fans betting $20 on the Cowboys.
WASHINGTON – Everyone’s panicking over the Senate’s version of the One Big Beautiful Bill Act and its new 90% cap on gambling deductions. But here’s the truth: unless you’re a full-time gambler or grinding for tax-efficient profits, you’re not going to notice a thing.
Let’s call it what it is: sports betting is entertainment, not income and most bettors already lose money.
According to the IRS and multiple academic studies:
- Fewer than 3% of bettors show net positive results long-term with Birches Health showing roughly 1% of bettors turning a profit.
- A 2023 study by UNLV’s International Gaming Institute estimated over 90% of sports bettors end the year in the red.
Which means if you lose more than you win, and don’t report gambling winnings, this rule doesn’t apply to you anyway.
Further, very few bettors even claim legal sports betting and gambling income. The IRS has data for this. In 2019, there were just over 140,000 federal tax returns claiming gambling winnings.
In contrast, an estimated 37 million Americans will place at least one sports bet by 2025, according to eMarketer
That’s less than 0.3% of bettors reporting anything.
Now, will that number go up as online casino gambling and sports betting have grown? Sure. But not by much because the IRS has a threshold to automatically report sports betting winnings (Form W-2G). This rarely triggers unless you’re betting 6-leg parlays for $2,000 a pop.
In short, this targets pros, not $25-parlay casuals. Sure, this bill hurts the professionals, the full-timers, the arbitrage players, poker grinders, and sharp DFS players using tools and bankrolls like businesses. But that’s maybe 10,000 to 20,000 Americans, tops.
Everyone else — the weekend Warriors betting on the NFL in support of their hometown Cowboys, Chiefs, or Commanders — won’t see a dime of difference.
The Bottom Line
Lastly, it’s not even the law yet. The bill must still pass through reconciliation, as the House’s original version didn’t even include this tax change. And with pushback from both poker stars and lawmakers, it’s far from guaranteed to survive.
Even if it does? It won’t take effect until 2026. So you can still enjoy your 2025 NFL season tax-free, unless you go on a massive heater and win five figures.
Is this bill a problem for high-volume, high-margin gamblers? Absolutely. But the average bettor, who throws $20 on a same-game parlay and might win $100 once in a while?
They won’t pay a dime more. And probably never did. So save the outrage. The IRS still isn’t coming for you.
