i\'ve been off the board a few weeks and other than seeing the comments, whta is the new IRS rule?
The current law says you can deduct losses to the extent of your winnings.
The new law says you can only deduct losses up to 90% of your winnings.
Technically, under both laws, one is required to report all gambling winnings.
Technically, we should all be keeping detailed records of our winning and losses.
For example:
Player Shannie cashes $1 million in winning bets in 2026.
Player Shannie loses $10,000,000 on all other bets (LOL).
Player Shannie gets to deduct $900,000 in losses against his $1,000,000 in winnings.
Thus, despite losing $9,000,000 dollars net, Player Shannie gets to report $100,000 in gambling winnings and pay Uncle Sam income tax on the $100k
What a Big Beautiful Bill. LOL
I think I have this right. It means we all need to retire January 1, 2026.
Thank you for this. I\'m surprised. I guess to the track live is back in vogue.
That would be reportable winnings. Not a Million $$ in just winnings.
There are similar but slightly different rules when it comes to reporting Capital Gains and Losses on Stocks. If it a Loss year you get capped at $3K with a roll over.
Also if a Businessman has 4 or 5 LLC\'s and he makes some money on all but that one has $1,000,000 in losses giving him a net loss of $800,000 he is capped out at approx $600,000 ( does he file single or jointly). However again there is a rollover.
The only thing missing on this gambling loss rule is the rollover.
Not the same. The capital gains rules allow you to use a net loss to offset other income, within limits.
As for gambling loses, even under the prior rules, you could only use them to offset gambling winnings. You could not use net gambling losses to offset other income.
Under the new rules, you are always required to pay tax on 10% of your winning wagers, even if you have a net gambling loss for the year.
As a practical matter, I assume that most people don\'t report gambling winnings on wagers for which they do not receive a W-2G.
Well said in that first sentence. For the sake of brevity, I wasn\'t specific enough.
And yes, in that last paragraph, if someone has a $5K Signer today but won $6K gross. Only the $5K gets reported and the payor withholds 28%. So once you have $5K in losses only $4.5k (90%) of losses would be allowed so thats $500 taxable income net. If you want to report the other $1,000 well that up to you.
Gambling winnings for things like large Parlays are reported.
For sports betting, including parlays, the provider is required to issue you a Form W-2G if your winnings are $600 or more and the payout is at least 300 times your wager.
However, even if your win does not meet this threshold and you do not receive a form, you are still legally obligated to report the income.
Other forms of gambling are now legal and more popular. Horse racing was not being singled out. Hopefully that\'s clear and if not its not taken personally. Straighten me out
BitPlayer Wrote:
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> Not the same. The capital gains rules allow you
> to use a net loss to offset other income, within
> limits.
>
> As for gambling loses, even under the prior rules,
> you could only use them to offset gambling
> winnings. You could not use net gambling losses
> to offset other income.
>
> Under the new rules, you are always required to
> pay tax on 10% of your winning wagers, even if you
> have a net gambling loss for the year.
>
> As a practical matter, I assume that most people
> don\'t report gambling winnings on wagers for which
> they do not receive a W-2G.
The post quoted above is 100% correct and the post it replies to was incorrect.
What\'s more --
1) Although it is true that nobody (virtually nobody) reports gambling winnings for which they do not receive a W-2g - that was true under a regime were the vast majority of taxpayers would not have owed any tax - it would have been a dead end for the IRS (or any finders fee types) to go after these people. In the new regime, there are two new factors that change the whole equation - (a) a large amount of people who will owe a large amount of tax and (b) a new incentive for people to force collection (see infra).
Let\'s put aside for a moment the question of whether this applies to professional gamblers, look at gross payouts at all parimutuel wagers and all sports/racebooks that are US taxpayers. We are talking about billions of dollars here -- according to AI - $10 billion handle for parimutuel and $30 billion in legal sports betting. So, looking at that handle, blending the take out between sports betting and horses - lets say that take out totals 10%. That means that these companies report to the IRS that they tendered $36 billion of reportable gambling \"winnings\" to \"winning\" bettors. Even though those gamblers as a whole by definition were losers (don\'t forget the take out), According to the IRS, ALL of those \"losers\" actually made $3.6 Billion of taxable \"winnings\".
So, under the prior regime, there was nothing in it for the IRS to go after these people for not reporting because almost everybody was a loser plus there was almost no money at the end of the road for the few who might have won. Under the new regime, EVERYBODY is now a winner AND there is at least $1 billion per year every year of collectable taxes out there to collect. Very different situation. You can say $1 billion is so small that the IRS wont do anything about. However, keep in mind, this is a sin tax and it accrues year in and year out. What stops a church from going to the IRS and pointing out all the uncollected sin taxes going on in its parish? The church can give the IRS the clear diagram on how to collect the uncollected sin taxes and the church gets a cut of anything they directed the IRS to go collect. The only thing you can do to avoid this is to either not bet, or only bet cash in person in an untraceable way (i.e. no more tracking play for rebates or benefits).
This analysis ignores new taxes that would become due as a result of the falsely inflated AGI. Gamblers\' AGIs will escalate big time due to the fact that \"winnings\" go into the AGI and losses only may be deducted after the AGI is determined.
This is a sop to churches. It gives churches a new source of revenue - they can tattle tale to the IRS for all the people in their parish not reporting their \"gambling winnings\". I predict that your total handle at your wagering platforms will become the new W-2g. Imagine if alcohol or tobacco sellers cooperated with their customers to avoid their sin taxes. This is the easiest thing to forsee. Not reporting will no longer be a way out like it was under the prior regime.
I would love to be wrong here. I wish I was wrong here. I am planning to convert all my 2026 play into contest play as a way to keep gambling while reducing my sin tax bill. One would think that betting platforms would be worried about bettors like me changing their patterns. It could be disastrous for the sport.
2) There are many other huge ridiculous complications. Arguably, this sin tax on gross cashes doesnt apply to professional gamblers - the argument runs that they use Schedule C and are allowed to net and they pay tax on their winnings. However, the tax they pay on their winnings pales in comparison to the taxes they would pay on 10% of their handle. Also, does it make sense that a person can get out of paying a sin tax by being a professional sinner? Whatsmore, under that theory, everybody is now a professional since everybody is deemed to win 10% of what they bet. It is a total mess and makes no sense whatsoever. How on earth the IRS is going to enforce this is crazy plus with the finders fees and churches looking at a new source of revenue from finders fees on getting sin taxes paid. Oy.
3) You might say I am being irrational about the church and state thing here, and I wish I was, but I would direct you to two things - current trends in caselaw on separation of church and state plus the fact that Russel Vought (the architect of all this) is devoutly religious and makes all this stuff both in business and in the supreme court a religious crusade. You may ask yourself why bother with taxing false gambling winnings. IT was a silly thing. But they did it and they did it for a reason. That reason is a drive to increase tax revenue from sinners. Again, I wish I was wrong here. Would love to be wrong here, but under the current supreme court, I fear I am correct.
4) The result of this is just incredible sadness. This is so sad I cannot believe it. What on earth merits penalizing people for how they choose their hobbies. Believe me, if this were a tax on golf course fees, the people imposing this on us would back off so fast everybody woudl get a nosebleed. One way to look at this is that we are being penalized because we choose to spend our Saturdays at the horse races instead of on the golf course.
Silver Charm Wrote:
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> Well said in that first sentence. For the sake of
> brevity, I wasn\'t specific enough.
>
> And yes, in that last paragraph, if someone has a
> $5K Signer today but won $6K gross. Only the $5K
> gets reported and the payor withholds 28%. So once
> you have $5K in losses only $4.5k (90%) of losses
> would be allowed so thats $500 taxable income net.
> If you want to report the other $1,000 well that
> up to you.
>
> Gambling winnings for things like large Parlays
> are reported.
> For sports betting, including parlays, the
> provider is required to issue you a Form W-2G if
> your winnings are $600 or more and the payout is
> at least 300 times your wager.
> However, even if your win does not meet this
> threshold and you do not receive a form, you are
> still legally obligated to report the income.
>
> Other forms of gambling are now legal and more
> popular. Horse racing was not being singled out.
> Hopefully that\'s clear and if not its not taken
> personally. Straighten me out
You assume that prior reporting rules will not change. It will be incredibly easy for them to change the reporting rules so that the wagering platforms are required to give you a year end w-2G for your gross cashes. Wish I was wrong, but it is the logical extension of everything we are seeing. how on earth could anybody fight such a new reporting rule. See my other post and consider the authority that Russell Vought has over the IRS.
Well those are the current rules. Not these might be the rules or could be the rules. We are not there yet. Voight only has power now because Schumer shut the government down, Anything else requires an act of Congress,
Aren\'t Powerball Winnings taxable? So why would a $500,000 Pick 6 or 10 Play Sports Parlay be exempt?
If ALL horse racing winnings get reported then so should the corner convenience store scratch off for $100. But we are not there yet. Not even close. States are involved here too and they need this income.
Silver Charm Wrote:
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> Well those are the current rules. Not these might
> be the rules or could be the rules. We are not
> there yet. Voight only has power now because
> Schumer shut the government down, Anything else
> requires an act of Congress,
>
> Aren\'t Powerball Winnings taxable? So why would a
> $500,000 Pick 6 or 10 Play Sports Parlay be
> exempt?
>
> If ALL horse racing winnings get reported then so
> should the corner convenience store scratch off
> for $100. But we are not there yet. Not even
> close. States are involved here too and they need
> this income.
Powerball and scratch off tickets are impossible to track.
Wagering platform information is incredibly easy to track.
The number they want tracked is an incredibly easy number -- all annual cashes by customer ID. It is significantly easier to report than signers. This is a tax on gambling - you don\'t think churches will show up in the IRS Rulemaking and point out how easy it is to administer this new gambling tax? The hard part is already done - implementing the gambling tax - administering it is far easier.
Vought and Trump have the power even before the shutdown, we are way down the path of the legislature ceding its authority to the executive. It is not even a close call.
This is akin to the frog in the water seeing the flame turned on and saying oh, there is nothing to worry about, lots of stuff needs to happen before the water gets too hot.
This is plain and simple an outright tax on gambling. I guess there is no sympathy for gamblers. This is Dr. Seuss - we are all trees and we have no Lorax speaking for us.
95% of that is hypothetical. Or your opinion.
The same crew who ran on \"No Tax on Tips\" which took an act of Congress to pass suddenly have the random power to say all sport wagering winnings are taxable. Specifically horse racing sports betting. Thats not true. The Executive Branch does NOT have the power to do things like this themselves (except during a shut down) and there are no proposals to change this anywhere. Again these are your opinions.
Silver Charm Wrote:
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> 95% of that is hypothetical. Or your opinion.
>
> The same crew who ran on \"No Tax on Tips\" which
> took an act of Congress to pass suddenly have the
> random power to say all sport wagering winnings
> are taxable. Specifically horse racing sports
> betting. Thats not true. The Executive Branch does
> NOT have the power to do things like this
> themselves (except during a shut down) and there
> are no proposals to change this anywhere. Again
> these are your opinions.
I don\'t follow. The OBBBA mandates that the gambling loss deduction is capped at 90% of gross cashes. That is an act of congress mandating this tax on gambling; this is not the executive branch doing it. I wish and pray and hope I am wrong. Would love nothing better than to be wrong. Please please please show me I am wrong.
The IRS doesn\'t require anything further from Congress to implement the regulations. The Loper Bright case overruling Chevron allows the Supreme Court de novo review of the regulations, but who in their right mind would think that this Supreme Court is going to overturn any regulations by this IRS. You can call this speculation on my part, but any Supreme Court practitioner will say this is one of the easiest calls of all time.
If you think my actual speculation (who wants and why and how they will get) is off base, ask yourself this, why did they enact this law in the first place and why did they refuse all attempts to change it? Somebody wanted something. Congress doesn\'t just pass random stuff that not a single person wants. Somebody wants it. It is not speculation to say someone wanted this. Where I am speculating is the idea that whoever wanted it, is going to finish the job to make what they got enacted effective. Maybe you can say they are incompetent and will screw it up, but I would say the evidence backs up my argument over the contra.
I would love nothing better than for me to be wrong here. This is not an argument I would like to win. I hope and pray you are right and I am wrong.
Its all good man and I enjoy the debate. And I want to avoid any Politics.
Here is a scenario I thought about. Lets say they make Sports Wagering Taxable. Twin Spires is required to send into the IRS a 1099-Gambler form.
I make a $100 Win bet at home on my account before I go to the Track. When I get to the Track I make another $100 Win Bet. The horse wins. Twin Spires reports my winner. But how does the On Track winnings get reported?
How do the On Track Losses get added in? Trying to tax On Track winnings would be as difficult as trying to tax Scratch Off winners at the Convenience Store of Lottery Tickets.
Here is the deal. There has been massive growth in on line wagering not just on horses but sports. Fan Duel, Bet MGM. Hard Rock. Its no longer what happens in Vegas stays in Vegas. Including Gambling winnings. Churchill Hill had a recent case where they had a Judge rule that wagers being made in Michigan but were routed thru an Oregon ADL they own were wagers made in Oregon. NYRA and many others were irate. Its the Wild West. But at the end of the day it comes down to DONT BITE THE HAND THAT FEEDS YOU. And that would be the Gamblers.....
Silver Charm Wrote:
-------------------------------------------------------
> Its all good man and I enjoy the debate. And I
> want to avoid any Politics.
agreed
>
> Here is a scenario I thought about. Lets say they
> make Sports Wagering Taxable. Twin Spires is
> required to send into the IRS a 1099-Gambler form.
>
>
> I make a $100 Win bet at home on my account before
> I go to the Track. When I get to the Track I make
> another $100 Win Bet. The horse wins. Twin Spires
> reports my winner. But how does the On Track
> winnings get reported?
This isn\'t a lot different than the rest of life. There are various places where they will give you a 5% discount if you pay in cash. Something tells me that the credit card patrons\' business is reported to all relevant tax authorities and the cash paying customers\' business somehow doesn\'t make it into the relevant ledger. Just a guess, but wouldn\'t be a surprise. You see this in many many places. Cash economy is able to slip out of the electronic system. Same is true with crypto (if anonymity is maintained). I just think like in other places, there will be a sliver of business that escapes from the recordkeeping. Just a fact. Of course, one solution to our predicament is going to cash in person. But, as a practical matter, this has other problems - (a) you lose all your frequent customers benefits (no rebates, no freebies), (b) you add a lot of time and cost to the experience that you dont have in living room downs, (c) just handling cash is a big problem - what happens if you have a bad day and exceed your ATM limits? Things like this will lower your handle on track vs electronic, (d) your in person losses are no longer deductible. If you play mostly in person and rarely on line, but you have a big score online, you can only deduct your online losses, not your on track cash losses - this will worsen your tax position rather than help it. Finally, from the standpoint of the IRS, they dont really care - as long as they have compliance for the most part, the sliver that escapes them is going to be more trouble than it is worth for them. Again, this is like many other areas - they are going to look at the big picture - and here the big picture is that for the most part, this is going to be easy to enforce.
>
> How do the On Track Losses get added in? Trying to
> tax On Track winnings would be as difficult as
> trying to tax Scratch Off winners at the
> Convenience Store of Lottery Tickets.
>
AS mentioned above, you dont get the on track losses, but that is all part of the equation. You cant have it both ways - you can say you want to escape detection for cashing but not escape detection for losing. The IRS looks at this with a wide lens. They understand and know some people will do what it takes to avoid detection, but as long as those numbers are small, it wont be worth the effort/cost to go after.
BTW, if the effect of this move is to force everybody off track and go to scratch off lottery tickets - that is a great move from the government perspective. The government makes way more money of scratch off lottery tickets than it does off live horseracing. From their standpoint, it would be terrific if all horse bettors decided to play state lotteries instead of going to the track.
> Here is the deal. There has been massive growth in
> on line wagering not just on horses but sports.
> Fan Duel, Bet MGM. Hard Rock. Its no longer what
> happens in Vegas stays in Vegas. Including
> Gambling winnings. Churchill Hill had a recent
> case where they had a Judge rule that wagers being
> made in Michigan but were routed thru an Oregon
> ADL they own were wagers made in Oregon. NYRA and
> many others were irate. Its the Wild West. But at
> the end of the day it comes down to DONT BITE THE
> HAND THAT FEEDS YOU. And that would be the
> Gamblers.....
There is no question they are biting the hand that feeds them. They are making the bet that Gamblers dont care and will just plow ahead. This is like going all in every hand in poker. It works fabulously until the one hand where you get knocked out. This is going to work out great for the tax authorities, but if they dont kill the golden goose with this one, how much do you want to bet the next improvement is to cap deductible losses at 80%? At some point, one of these moves will kill the golden goose and our sport will die.
Good rundown of the impact of the idiotic new rule.
https://sbcamericas.com/2025/10/06/one-big-beautiful-bill-abv-paper/
There should not be anything personal in any of this stuff - the arguments and issues going on are larger than any person. I do not really care about the politics of the change - I care more about either fighting the change or adapting to the change.
What is really frustrating to me is that by considering personalities and politics, we get distracted from what is actually happening. The truth is the one thing we all on this board can agree on is that we love horseracing and care about its future. That much we should all be able to agree to.
So let\'s focus on the threat to the thing we love. It is new tax. It seems there are only three possible responses - (a) fight the change and hope to succeed, (b) accept the change and then adapt to the new world (for me, this means only playing in a format that leaves no record, or only playing tournaments), or (c) put your head in the sand and then both you and the sport get runover by the steamroller at some point.
If we want the industry to survive, it seems like the industry needs to do either (a) or (b) (and work with its players to survive in the new world). Unfortunately, it looks like (c) is what is happening (and is the default of neither (a) nor (b) are pursued).
A long time ago, there were studies about the impact of take out on handle - and the studies showed that if you reduce the percentage of take, your gross take, in absolute terms, goes up. This is because of churn. If you give bettors back dollars instead of pulling them out of circulation, the bettors rebet those dollars and you get multiple attempts to take stuff out. The studies showed that churn was the really important factor. In real life terms, compare betting Superfectas at place that takes 30% out of the Superfecta pool with betting pick 5s with a 15% take. The difference is dramatic. There is no question what is sustainable and what is not. this new tax is going to dramatically reduce churn. This new tax is an absolute assault on churn. If I were a racetrack operator, I would be messing my pants because of what this does to churn.
Here is an example, lets say you bet $10,000 to show on prohibitive favorites in races with a negative show pool. Say you do this 20 times in a year, and lets say you go 19 for 20. In this scenario, you have cashed for $199,500 on wagers of $200,000. By most sane standards, you lost $500. Also, you don\'t really need a bankroll of $200,000 to bet the $200,000. In the worst case scenario - you lose you first bet and win the others, you only needed a bankroll of $20,000 to have a handle of $200,000 (see, the magic of churn).
Here is the problem -- according to the IRS, you won $199,500 and then you are allowed to deduct only 90% of your losses. What are you losses here? it is the single $10,000 bet you lost. So you won $199,500, you lost $10,000 but you are only allowed to deduct 90% of that or $9,000. According to the IRS, you owe tax on $190,500. At 30%, that means your tax bill is $57,150. Yes, in this scenario, you lost $500 on handle of $200,000 and you owe the IRS $57,150.
Would love to understand why my example is wrong. Would also love to know why racetracks think this is okay and that their horseplayers will keep coming back for this sort of punishment.
Socalman3 Wrote:
-------------------------------------------------------
Your points about churn are valid imho but there is not an intelligence pre-requisite for lawmakers so we end up with stupid laws and regulations.
(b) accept the change and then
> adapt to the new world (for me, this means only
> playing in a format that leaves no record, or only
> playing tournaments
I want to add technically it is the taxpayers responsibility to report winnings from gambling. Whether it came from a tournament or live at the track.
Yet regarding ADW\'s only U.S. based ADW\'s are required to provide W-2\'s. Offshore ADW\'s have no such requirement and do not. I repeat - do not report winnings which are available in crypto and can be anonymous as well as accessed via VPN.
Wondering how many of us can expect EOY W-2\'for our 2025 action?
Tavasco Wrote:
-------------------------------------------------------
> Socalman3 Wrote:
> --------------------------------------------------
> -----
> Your points about churn are valid imho but there
> is not an intelligence pre-requisite for
> lawmakers so we end up with stupid laws and
> regulations.
>
> (b) accept the change and then
> > adapt to the new world (for me, this means only
> > playing in a format that leaves no record, or
> only
> > playing tournaments
>
> I want to add technically it is the taxpayers
> responsibility to report winnings from gambling.
> Whether it came from a tournament or live at the
> track.
>
> Yet regarding ADW\'s only U.S. based ADW\'s are
> required to provide W-2\'s. Offshore ADW\'s have no
> such requirement and do not. I repeat - do not
> report winnings which are available in crypto and
> can be anonymous as well as accessed via VPN.
>
> Wondering how many of us can expect EOY W-2\'for
> our 2025 action?
I wouldn\'t expect anything for 2025 action as the new rules will only apply for 2026.
The reason to play tournaments is that it will dramatically reduce \"Gambling Winnings\" not that you should not report something. If you play feeders for the BCBC or the NHC - you don\'t win any money....you win an entry to another tournament - at the NHC, you only have winnings if you cash in the end. For the BCBC, you churn for the whole breeders cup...your \"winnings\" are not your cashes but what is net left in your account at the end. I only plan to play feeders into the largest tournaments and only very large tournaments. My handle will go way down and so will my cashes. My potential tax bill will be minimized. The big loser from this is going to be the tracks - they will lose the money in their handle from me and players like me.
I will bet untraceable live cash at racetracks/casinos - but becuase I need to be physically present, my action will be way lower than it is when I am betting in Living Room Downs. Again, the tracks are the big loser here.
A W-2g or 5754 would not be triggered in this string\'s scenario as both the $600.00 winning wager and a 300x profit on the amount wagered needed to trigger the filing are not met. The player would then be left on his honor to report net (proceeds minus cost basis) winnings on Schedule 1 of their return. Professional players are either smart enough on their own or have someone in the employ to navigate Schedule C.
So we are still left with the ten percent hangover on net winnings should it come to fruition. There are crypto options and other navigable paths, but the racing industry, especially the struggling or closed venues could potentially exploit this egregious issue, and move to a prediction based pari mutuel environment creating a longer term tax benefit to the more than everyday player, and possibly bring in some new players to a game that desperately needs new fans and a new base.
Don\'t post/ don\'t play much anymore, but there is no evidence (SO FAR), the filing requirements that trigger a W-2g or 5754 for the syndicates will change. Hoping a reader out there with any pull can see this as a potential advantage to the racing industry. Good luck to all.
It’s all shut down anyway.
Allegedly.
johnnym Wrote:
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> It’s all shut down anyway.
> Allegedly.
what is?
Gerard Wrote:
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> A W-2g or 5754 would not be triggered in this
> string\'s scenario as both the $600.00 winning
> wager and a 300x profit on the amount wagered
> needed to trigger the filing are not met. The
> player would then be left on his honor to report
> net (proceeds minus cost basis) winnings on
> Schedule 1 of their return. Professional players
> are either smart enough on their own or have
> someone in the employ to navigate Schedule C.
>
> So we are still left with the ten percent hangover
> on net winnings should it come to fruition. There
> are crypto options and other navigable paths, but
> the racing industry, especially the struggling or
> closed venues could potentially exploit this
> egregious issue, and move to a prediction based
> pari mutuel environment creating a longer term tax
> benefit to the more than everyday player, and
> possibly bring in some new players to a game that
> desperately needs new fans and a new base.
>
> Don\'t post/ don\'t play much anymore, but there is
> no evidence (SO FAR), the filing requirements that
> trigger a W-2g or 5754 for the syndicates will
> change. Hoping a reader out there with any pull
> can see this as a potential advantage to the
> racing industry. Good luck to all.
These are all regulations based on obsolete laws. The new laws make anybody who cashes a relevant taxpayer. Under prior law, there were virtually no relevant taxpayers. Existing regulations are irrelevant under entirely different legal regime. Regulations for new law will be dramatically simplified for W-2G -- they write themselves easily. In new regime, all you need is a very simple W-2G issued by any platform on an annual basis.
In terms of coming to fruition -- the law is the law, it is on the books and exists......what does should it come to fruition mean?
The Government
johnnym Wrote:
-------------------------------------------------------
> The Government
Presumably that will be temporary, but who knows. Here are some choice quotes I learned in law school that seem strangely applicable to the current situation:
1) There are no certainties in life except death and taxes.
2) The mills of the gods grind slow, but they grind fine.
3) The race doesn\'t always go to the swift or the battle to the strong, but that is the way to bet it.
Translation - A reprieve is by definition temporary.
Re 3), Damon Runyon taught at your law school?
TGJB Wrote:
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> Re 3), Damon Runyon taught at your law school?
No, but Marvin Chirelstein did. Chirelstein was a tax law professor and a horseplayer. If he were alive today and was available to testify before Congress about this particular tax provision he would fricassee any proponent of this provision. There are only two possible policy explanations for this tax provision and any tax professional would agree: (a) it is a political hit job by one faction against another faction or (b) sin tax theory. There is no bona fide economic theory to justify this tax.
Socalman3 Wrote:
-------------------------------------------------------
> TGJB Wrote:
> --------------------------------------------------
> -----
> > Re 3), Damon Runyon taught at your law school?
>
> No, but Marvin Chirelstein did. Chirelstein was a
> tax law professor and a horseplayer. If he were
> alive today and was available to testify before
> Congress about this particular tax provision he
> would fricassee any proponent of this provision.
> There are only two possible policy explanations
> for this tax provision and any tax professional
> would agree: (a) it is a political hit job by one
> faction against another faction or (b) sin tax
> theory. There is no bona fide economic theory to
> justify this tax.
Left out the important part, Chirelstein quoted Damon Runyon in our law school class. I learned the quote in that context, but Chirelstein did not take credit for Runyon\'s quote - pretty sure he gave the cite.
This heavily favors prediction markets
As my professor said and I quote.
“ It’s one big club and you ain’t in itâ€.
Good luck
How idiotic! The country needs a complete tax reform in every aspect. Gas, sales, income, property, gambling, liquor tax all need to be reconsidered.
johnnym Wrote:
-------------------------------------------------------
> As my professor said and I quote.
> “ It’s one big club and you ain’t in itâ€.
> Good luck
George Carlin said that. He grew up right next door to my law school.
Byrd Rule
https://atr.org/congress-should-restore-full-deductibility-of-gambling-losses/
Multiple bills have been introduced to reverse the change:
FAIR BET Act (HR 4304) â€" introduced by Rep. Dina Titus (D-NV), this bill seeks to restore the full (100%) deduction.
NatP tax Blog
+2
NBC Sports
+2
WAGER Act (HR 4630) â€" introduced by Rep. Andy Barr (R-KY), this is a Republican-led effort to repeal the 90% cap.
CasinoBeats
+1
FULL HOUSE Act in the Senate (by Sen. Catherine Cortez Masto, D-NV) aims at a similar repeal in the upper chamber.
NBC Sports
+2
NatP tax Blog
+2
These efforts show bipartisan interest in reversing the deduction cut.
NBC Sports
+2
CDC Gaming
+2
However, so far, attempts have been blocked or stalled â€" for instance, Senator Todd Young (R-IN) objected to a unanimous consent move to overturn the change.
The Nevada Independent
+2
NBC Sports
+2
Additionally, the FAIR BET Act has gained new cosponsors, including both Democrats and Republicans, which suggests growing support.
CDC Gaming
âš ï¸ Challenges and likelihood
Procedural hurdles: Because the change was part of a large tax/appropriations bill, rolling it back may require going through the same complex legislative processes, which are difficult to navigate.
Revenue impact: The limit is projected to raise about $1.1 billion over 10 years, giving it some fiscal appeal.
NatP tax Blog
+2
The Nevada Independent
+2
Political will: Some lawmakers reportedly weren’t aware the gambling change was included in the larger bill, so awareness and pressure may drive more support.
The Nevada Independent
+1
Timing: The 90% limit doesn’t take effect until 2026, so there is still time for Congress to act before implementation.
NatP tax Blog
+1
belmont3 Wrote:
-------------------------------------------------------
> Byrd Rule
> https://atr.org/congress-should-restore-full-deduc
> tibility-of-gambling-losses/
This is interesting. But leaves a lot unanswered.
First off, I have to think that if they need to find extra revenue to fill a gap to comply with the Byrd Rule they had some choices - they could have added any other tax, but they chose to add this one - what were the other candidates that lost out (actually won out) to this one? How did the jockeying work out?
Second, the Byrd Rule is sort of like balance sheet and/or double entry accounting. If they needed to add something on one side of the ledger to make things balance (my first point above), the other way to address it is to reduce the item on the opposing side of the ledger. So, there were other candidates to add, but there also had to be possible candidates to take away. What were those?
This article seems to suggest that nobody intended to stick a fork into gamblers, they just needed to find money somewhere fast. But they always need to find money fast and there are always a bunch of choices with lobbyists fighting to get picked (or not picked). I do not believe that it was an innocent oversight. There were alternatives that had bigger protection rackets than our alternative had. That is the way things work on capitol hill. Unfortunately, these choices are not made based on logic, math, and geometry. They are made by brute politics.
Socalman3 Wrote:
-------------------------------------------------------
> belmont3 Wrote:
> --------------------------------------------------
> -----
> > Byrd Rule
> >
> https://atr.org/congress-should-restore-full-deduc
>
> > tibility-of-gambling-losses/
>
> This is interesting. But leaves a lot unanswered.
>
> First off, I have to think that if they need to
> find extra revenue to fill a gap to comply with
> the Byrd Rule they had some choices - they could
> have added any other tax, but they chose to add
> this one - what were the other candidates that
> lost out (actually won out) to this one? How did
> the jockeying work out?
>
> Second, the Byrd Rule is sort of like balance
> sheet and/or double entry accounting. If they
> needed to add something on one side of the ledger
> to make things balance (my first point above), the
> other way to address it is to reduce the item on
> the opposing side of the ledger. So, there were
> other candidates to add, but there also had to be
> possible candidates to take away. What were
> those?
>
> This article seems to suggest that nobody intended
> to stick a fork into gamblers, they just needed to
> find money somewhere fast. But they always need
> to find money fast and there are always a bunch of
> choices with lobbyists fighting to get picked (or
> not picked). I do not believe that it was an
> innocent oversight. There were alternatives that
> had bigger protection rackets than our alternative
> had. That is the way things work on capitol hill.
> Unfortunately, these choices are not made based on
> logic, math, and geometry. They are made by brute
> politics.
I don\'t mean to be critical of the author of the article. I guess you need to put out the mistake or accident language in order to allow the people changing their vote to save face. But, the reality is what happens behind closed doors.
I\'ve been told more than a few times that this will be corrected at some point but unlikely that it happens this year.
If that does happen at any point after Jan 1, 2026, \"will it be retroactive?\" is the question.
For now, the few pro horse racing gamblers are likely going to forego their rebate and fire away in the pools via cash is my educated conjecture. They will likely use agents to bet in cash from multiple locations including across one of the borders to not draw attention (spreading wagers out over multiple people) and for tax reasons. (typically Canadian gambling winnings are tax free)
ADW\'s are not required to report all of your winnings to the IRS and the latest law did not change that. However, like SoCalMan I wonder if the IRS decides otherwise but as of now my understanding is the w2-g winnings are the only reported amounts per the rules as previously stated: (winnings are $600 or more And winnings are 300x the amount of the wager).
As for the trade off here . . . I have always just **assumed** that the depreciation and breeding Celebrations by NTRA for the Kings of the Sport in the Big Beautiful Bill were at the expense of the lowly gamblers who are looked at with disdain by the acceptable folks in society.
Happy Gambling in 2026!! (you might just be gambling on if the ADW\'s are required to report All of your documented gambling activity at some point)