The US Congress has just passed Donald Trump’s huge budget bill, known as ‘The Big Beautiful Bill,’ and former poker pro and BetRivers Poker ambassador Phil Galfond has said that the effect it will have on pro poker players is “much worse than anything that’s happened in poker” before.
The amendment to the bill that affects poker players was described in an X post by Galfond.
“If it passes in this form, starting in 2026, gambling losses (and expenses) will only be 90% deductible (and still only up to your total winnings).
What this means in plain English:
- If you win $100k and lose $100k –you’ll owe tax on $10k of 'phantom' income.
- A pro who earns $200k/year might have $3m in winnings and $2.8m in losses. This means earning $200k and being taxed as if they earned $480k.) This applies to both recreational and professional gamblers.”
It means that poker players and gamblers could have break-even years and still have to pay tax on income that they haven’t earned.
There was hope that the gaming part of the bill would be modified before it was passed, but that hasn’t happened. The bill is now ready to go to Donald Trump for his signature.
Speaking on News Nation, Rep. Dina Titus (D-NV) expressed concern, saying, “We’re going to try and take it out, but if it doesn’t go back to rules (Rules Committee), we can’t, and then I’ll introduce a separate bill. It pushes people into the black market.”
We spoke with Phil Galfond ahead of the bill being passed by Congress.
'Worse than anything that's happened in poker'
The basic details of this amendment mean poker players could end up paying more tax than they earn. And if they have a breakeven year, they would still owe taxes. Why do you think the amendment has been drafted like this?
I don’t know why the amendment was drafted this way, but I presume it’s because they don’t understand gambling nuance. Few people do outside the gambling industry. They probably intended to tax gambling a bit more and didn’t realize they were introducing terms that would tax people an amount larger than they earned.
If it passed in its current form, what do you think the effects would be on poker players and the poker industry?
For poker players, it makes being a pro in the US essentially impossible. The only ones who could do it are the ones who choose not to report their earnings [and the big winners – see below].
As for poker more generally, you'll see a drop in traffic and liquidity, which in the US market is a big deal as we’re already in a lowish-liquidity market.
Poker can survive it, but it might just consist of recreational players. In some ways, they get rid of the pros so there might be more winning experiences for them, but then they become the winning players who have to pay unreasonable taxes. I think long term, if players can’t aspire to be long-term winners, it will turn a lot of people off.
What are the chances of it passing in this form?
I can’t wager a guess as to whether it will pass in its current form or not. If it does, will it have as devastating an effect as the UIGEA in 2006? I think it will be different. The effect on pros will be much worse than anything that’s happened in poker. The effect on non-pros will be a little similar, but game availability will go down. I think what will happen is that it will go offshore even more. It’s going to make the unregulated sites even more appealing.
What can poker players do about it?
Just spreading the word is a big deal, and so is contacting your representatives. They do read these things. I know people are fired up and trying because, obviously, this is very scary if you make a living in poker or the gambling industry.
I’m not playing that much these days, but I do coach poker players who are aspiring to be pros. It will impact me either way, and it will impact poker players. Everything I’ve done with Run it Once Poker and BetRivers Poker is to try and make the career of online poker a viable one, and one that stands the test of time. This is a slap in the face of that and very scary.
In a follow-up on X, Galfond clarified one point: “Small but necessary correction: The examples and math I shared were accurate, but after running through several scenarios, the words ‘would end professional gambling in the US’ were too strong. For poker, many pros will no longer be able to make it. But the big winners will remain.”
Reactions have started coming in after the news was announced about the bill being passed.
This is a developing story, and we will update as new updates are announced.
