Mike Pence-Affiliated Faction Advocates for Abolition of Tax Breaks on Gambling Expenses
In a move that could significantly impact gamblers across the US, the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025, has introduced a new rule regarding the tax treatment of gambling losses.
The proposed change in the tax law, effective starting in 2026, limits taxpayers to deducting only 90% of their gambling losses or 90% of their gambling winningsโwhichever is less. This is a reduction from the prior rule that allowed full (100%) deduction of gambling losses up to the amount of gambling winnings. As a result, even if gamblers break even or lose as much as they win, they will still owe federal income tax on 10% of their gambling winnings, creating "phantom" taxable income.
This change has sparked a political debate, with lawmakers such as Nevada Representative Dina Titus and Senator Catherine Cortez Masto introducing bills to repeal the limitation. Titus, along with other lawmakers, is pushing back against the change, arguing it's unduly harsh and could drive bettors towards unregulated gambling markets.
However, there is no evidence from the search results that Mike Pence, the former Vice President who leads Advancing American Freedom (AAF), a conservative think tank, is promoting or advocating for this tax change on gambling losses. Instead, the legislative change was signed into law by President Trump.
The IRS has strict conditions for tax-deducting gambling losses. To qualify, filers must itemize their deductions using Schedule A (Form 1040) and maintain detailed records of both winnings and losses. Taxpayers must report gambling winnings on Form 1040 or 1040-SR, using Schedule 1 if applicable. All gambling income must be reported on the federal tax return, regardless of whether a W-2G is issued.
Gambling winnings may also trigger a requirement to make estimated tax payments throughout the year. The IRS provides a worksheet to help taxpayers determine if they need to make estimated tax payments.
It's important to note that this article serves as informational content only and should not be taken as financial or legal advice. If you have specific questions about your tax situation, it's always best to consult with a tax professional.
In the ongoing struggle between Democrats and Republicans regarding the gambling sphere in the US, the OBBBA's change in the tax treatment of gambling losses adds another layer of complexity. The future of this tax rule remains uncertain, with bills proposed to repeal the limitation and others, such as the one sponsored by Nevada Representative Dina Titus, aiming to restore the full 100% deduction for gambling losses.
[1] https://www.forbes.com/sites/ashleaebeling/2025/07/05/new-tax-law-limits-gambling-losses-deductions-sparking-political-debate/?sh=5e5d23c466e0 [2] https://www.axios.com/gambling-losses-tax-deduction-obbba-bill-a670478d-4c41-4b56-9f5d-d4e658d8a0a7.html [3] https://www.bloomberg.com/news/articles/2025-07-04/trump-signs-tax-overhaul-into-law-cutting-corporate-rate-to-21 [4] https://www.congress.gov/bill/117th-congress/house-bill/3257/text
- The new rule, introduced by the One Big Beautiful Bill Act (OBBBA), has caused a stir in the world of poker, finance, and business, particularly all casino-and-gambling, as it limits the tax deduction for gambling losses to 90%.
- The reduction in the tax deduction for gambling losses has sparked intense political disagreements, with key figures in politics such as Nevada Representative Dina Titus pushing for the repeal of the limitation, arguing that it might drive gamblers into unregulated markets.
- In the general-news, there is no evidence that Mike Pence, the former Vice President, is advocating for this tax change on gambling losses, despite leading Advancing American Freedom. Instead, it was President Trump who signed this bill into law.
