UFC President Dana White sent a letter to President Trump on May 11, 2026, calling for the reversal of one of the most controversial provisions in the One Big Beautiful Bill Act — a rule that limits gamblers to deducting only 90% of their losses against their winnings for federal tax purposes. The change, which took effect January 1, 2026, applies to all legal forms of gambling in the United States, including casino games, sports betting, DFS, racetracks, and online gaming.
Under the previous law, gamblers could deduct 100% of their losses against winnings up to the amount of their winnings. The new 90% cap means that the missing 10% does not carry forward and cannot offset other income — it simply becomes taxable. White highlighted the absurd outcome this creates: a casino player who wins $50,000 and loses $50,000 over a year has a net result of zero but can only deduct $45,000 of losses, leaving $5,000 in phantom income on which they owe taxes.
Who Is Most Affected
Frequent casino players and serious sports bettors are most exposed to the new rule. Casual players who win less than they lose and do not itemize deductions are unlikely to feel an impact at tax time. But for regular patrons of online casinos in states like New Jersey, Michigan, and Pennsylvania — where legal online gaming has created large, active player bases — the 10% cap on loss deductions can translate into real tax bills on money that was never actually profit.
The rule also applies to sweepstakes casino platforms to the extent users have made purchases that qualify as taxable gambling activity under IRS guidance, though the tax treatment of sweepstakes prizes and redeemed cash amounts differs and depends on the specific structure of each platform. Players at licensed New Jersey casino apps or Michigan casino apps who have significant winning and losing sessions over a year should consult a tax professional to understand their 2026 tax exposure under the new cap.
Legislative Path to Relief
The FAIR Bet Act, introduced by Rep. Dina Titus of Nevada and Rep. Guy Reschenthaler of Pennsylvania, would restore the full 100% deduction but has stalled in Congress. The AGA is actively lobbying on the issue. White’s letter adds the highest-profile industry voice to the push for relief. As of publication, no timeline has been announced for congressional action.
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