Trump Considers Ending Federal Tax on Gambling Winnings

Tax policy around gambling is back in the spotlight, with mixed signals coming out of Washington. One recent change tightened deductions, while new comments from President Donald Trump reopened the door to relief for winning bettors.

Good to Know

• Gambling loss deductions drop to 90 percent under current law
• Trump said removal of the tax on winnings remains under review
• Lawmakers and gaming leaders push Congress for a fast fix

The shifts arrive just weeks before the deduction cap takes effect, raising urgency across gaming and tourism circles.

Trump Signals Openness on Gambling Winnings Tax

President Donald Trump said he will consider removing the federal tax on gambling winnings, a step that would cut against part of the One Big Beautiful Bill Act. The law already limits how much gamblers can deduct when losses exceed winnings.

Speaking to reporters aboard Air Force One, Trump compared gambling to other income areas already addressed in the bill. Trump said in response to a question from a reporter aboard Air Force One on Tuesday, per Fox Business:

“We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime. No tax on gambling winnings? I don’t know. I’m gonna have to think about that.”

The bill already removed taxes on tips and overtime, creating a framework some lawmakers say could apply to gambling income as well. Trump has also floated the idea of eliminating income taxes more broadly, drawing mixed reactions from economists and lawmakers.

How the Numbers Shake Out

Consider a single filer earning $100,000 in annual income. That person wagers $10,000 during the year and ends up with $11,000 in winnings, for a net gain of $1,000.

Before the One Big Beautiful Bill Act, total federal taxes would reach $14,382, leaving $86,618 after taxes. Under the new structure, taxes rise to $14,622, dropping take home funds to $86,378.

Removing the federal tax on gambling winnings would lower that tax bill to $14,142, resulting in $86,858 remaining. The difference between current law and a repeal of the winnings tax equals about 0.6 percent in that example, though outcomes vary widely based on income and betting results.

Only bettors who win more than they lose benefit from removing the winnings tax. Losing players see no upside since winnings do not offset losses.

Pressure Builds on Capitol Hill

After Trump comments, Rep. Dina Titus of Nevada urged the House Ways and Means Committee to act quickly. With weeks left before the 90 percent deduction cap begins, she asked committee leadership to advance the FAIR BET Act.

Rep. Dina Titus sent a letter to chairman Rep. Jason Smith requesting a vote before the year end deadline.

“Support for this fix has been both strong and bipartisan,” Titus letter dated Thursday reads. “The legislation also enjoys broad industry support, including from the American Gaming Association, MGM, DraftKings, FanDuel, Caesars, Wynn, the Nevada Resort Association, and the National Thoroughbred Racing Association.”

Industry leaders echoed that push. Derek Stevens, owner of Circa Sports and multiple Las Vegas casinos, posted a video explaining why the deduction limit fails in practice.

Stevens said meetings with gaming executives and Rep. Jason Smith showed rare alignment across parties and sectors. Stevens said:

“I don’t know a single member of the U.S. House of Representatives or a single U.S. senator that wants this to go into action on Jan. 1. We were asked by the chairman of the House Ways and Means Committee, please call your U.S. senator, please call your member of the U.S. House of Representatives; there’s only a few days left … this change impacts the entire hospitality industry, the tourism industry, all of our employees, which is critical, as well as most of America, which has made a bet in the last year.”

90% Deductibilty doesn’t work. C’mon America!! pic.twitter.com/eKzqEtldbh

— Derek Stevens (@DerekJStevens) December 11, 2025

FAQ

What changed under the One Big Beautiful Bill Act

The law reduced gambling loss deductions from 100 percent to 90 percent.

Did Trump confirm removal of the gambling winnings tax

No final decision yet. Trump said the idea remains under consideration.

Who benefits from ending the winnings tax

Players who finish the year with net gambling profits.

What is the FAIR BET Act

A proposal that restores full loss deductions for gamblers.

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