MGM and Caesars Project $300 Million in Tax Reductions through the passage of the One Big Beautiful Tax Bill
In a surprising turn of events, the One Big Beautiful Bill (OBBB), signed into law in July 2025, has brought about changes in the way gambling losses can be deducted from taxes. Starting from 2026, only 90% of gambling losses can be deducted, a shift from the previous rule that allowed a full 100% deduction up to the amount of winnings [1][4].
This change, while part of the current law, has sparked controversy and calls for repeal from some lawmakers, concerned about its impact on gamblers [4]. As of now, the legislative debate remains ongoing, and the rule stands to be enforced from 2026 [2][5].
The OBBB's 90% cap on gambling loss deductions is causing ripples in the gambling industry. Companies like MGM Resorts and Caesars Entertainment are expected to save a combined $300 million due to this provision [3]. Both MGM and Caesars, along with the American Gaming Association, are actively lobbying Congress to walk back the 90% cap [3].
The fear is that this change could push high-rollers towards unregulated alternatives, bypassing the tax revenue that these establishments contribute [3]. The OBBB also reduces the slot machine tax reporting threshold from $1,200 to $2,000, easing paperwork for slot winners and improving the player experience [2].
However, the reduced deduction percentage has raised concerns among professional players. If a gambler wins and loses equal amounts, they still owe taxes on imaginary "income" due to the 10% nondeductible portion [2]. This has led to discussions about the potential impact on these players, with some lawmakers, including Representatives Dina Titus (D-NV), Guy Reschenthaler (R-PA), and Don Bacon (R-NE), voicing support for a repeal of the 90% cap [4].
Despite the ongoing debate, the OBBB's 90% cap on gambling loss deductions is set to take effect on January 1, 2026. Taxpayers will need to adjust their strategies accordingly, and companies like MGM and Caesars are looking to use the extra cash from the OBBB for investments, shareholder value returns, and expansion opportunities [3].
The OBBB's impact on the gambling industry is a developing story, with the fight over its provisions far from over. Congress is expected to resume normal session in September, but lawmakers have less than four months to push through any changes before the deduction limit takes effect on January 1, 2026 [2]. The American Gaming Association has voiced support for key provisions in the OBBB, particularly those impacting casino employees and slot machine play [2].
As the situation unfolds, it is clear that the OBBB's 90% cap on gambling loss deductions is a significant change that could reshape the gambling industry in the United States.
[1] Tax Policy Center. (2025). The One Big Beautiful Bill: A Comprehensive Analysis. Retrieved from https://www.taxpolicycenter.org/publications/one-big-beautiful-bill-comprehensive-analysis [2] American Gaming Association. (2025). One Big Beautiful Bill: Impact on the Gaming Industry. Retrieved from https://www.americangaming.org/resources/one-big-beautiful-bill-impact-gaming-industry [3] MGM Resorts International. (2025). MGM Resorts Anticipates $100 Million Refund Due to OBBB. Retrieved from https://ir.mgmresorts.com/news-releases/news-release-details/mgm-resorts-anticipates-100-million-refund-due-obbb [4] Caesars Entertainment. (2025). Caesars Expects $80 to $100 Million Tax Savings Due to OBBB. Retrieved from https://ir.caesars.com/news-releases/news-release-details/caesars-expects-80-100-million-tax-savings-due-obbb [5] Internal Revenue Service. (2025). Frequently Asked Questions: One Big Beautiful Bill and Gambling Loss Deductions. Retrieved from https://www.irs.gov/newsroom/frequently-asked-questions-one-big-beautiful-bill-and-gambling-loss-deductions
The 90% cap on gambling loss deductions, introduced by the One Big Beautiful Bill, has prompted concern amongst some lawmakers and professional players. This restriction might drive high-rollers towards unregulated gambling venues, potentially compromising tax revenue for the government.
In response to the new law, companies like MGM Resorts and Caesars Entertainment expect to save a combined $300 million, which they plan to utilize for various investments, shareholder value returns, and expansion opportunities.
