Donald Trump’s Big Beautiful Bill: Increase Tax on Sports Betting ‘Lose Money but Still Owe Taxes’ – Vegas Insiders Sound Alarm
The recent enactment of President Trump’s One Big Beautiful Bill, January 1, 2026, introduces major changes that will reshape sports betting in the UFC and beyond. UFC insider Gianni “The Greek” outlined the effects for commentator James Lynch in a candid conversation, emphasizing how professional bettors and regulated sportsbooks will adapt.
Donald Trump Increases Taxes on Sports Betting
The key tax changes under Trump’s One Big Beautiful Bill for sports betting take effect January 1, 2026: first, gamblers may deduct only 90 percent of wagering losses against winnings (from 100 percent since 1934), creating “phantom” income taxed at ordinary rates even in break-even years. This provision increases federal – and, in conforming states, state – tax liabilities for professional bettors.
“It’s basically saying that it could force some bettors, key word there: some, to pay income tax even in years when they have net losses in gambling,” Gianni said. Under the new law, gamblers may deduct only 90 percent of their losses against winnings, down from a full 100 percent deduction that had stood since 1934. “It could significantly hike the tax burden on professional sports bettors.” Those who rely on UFC fight lines, parlays and prop bets will now face “phantom income” taxed at ordinary rates, even if their overall season ends in the red.
“This isn’t going to affect everybody, right? We know that 99.5 percent of sports bettors have negative lifetime earnings, so they’re not profitable to begin with,” Gianni noted. Indeed, most recreational UFC fans who wager on fight-night underdogs or championship bouts will see little change, since they rarely turn a profit. “Who this is going to affect is that half a percent that truly makes their living betting sports. That’s who it’s going to affect, especially those that are forced to do it through books that are on the screen… those regulated, legal sportsbooks that report to the IRS.”
“Many of the winning bettors aren’t using on-screen books,” Gianni explained. “They’re using off-screen bookmakers—the illegal bookies that don’t report. The reason they do that is because they don’t want to tie up that kind of money in a non-interest-bearing account. You could put it in Coinbase and get 4 percent on your money just sitting there.” As a result, professional UFC bettors may increasingly shift volume to offshore or peer-to-peer platforms, weakening legal-market handle and possibly widening sportsbook spreads.
With professional bettors deemed “undesirable” risk by regulated operators, sportsbooks may follow a model akin to blackjack’s switch from 3-to-2 to 6-to-5 payouts, effectively pricing out card counters. “The sportsbooks do not want to deal with bettors that pose a risk,” Gianni said. “They no longer want to deal with it, and they don’t have to because of the legalization and the influx of recreational bettors.” UFC-level sharp bettors, whose margins are razor-thin, will question whether regulated on-screen wagering remains worth the diminished ROI.
Bettors and syndicates are already revising their business models. “They are definitely being forced to reorganize,” Gianni told Lynch. Some professionals may exit the industry or reallocate capital to less-taxed assets. “These guys aren’t gamblers. They use sports betting as an investment vehicle,” he said. If alternative investments offer comparable returns with lower tax drag, full-time bettors may simply shift their bankroll elsewhere.
Sports gamblers face a new federal landscape after President Donald Trump’s One Big Beautiful Bill Act became law on July 4, 2025. The nearly 900-page statute contains two tax-related provisions that directly hit bettors: Starting Jan 1 2026, gamblers may deduct only 90 percent of their wagering losses against winnings (down from 100 percent since 1934). And section 70433 lifts the IRS reporting threshold for slot, bingo, keno, and horse-pool jackpots from $1,200 to $2,000 and indexes it to inflation.
Congressional staffers concede the 90 percent cap was a late Senate-Finance insertion aimed at satisfying arcane reconciliation scorekeeping rules; few lawmakers foresaw the outcry from the $70-billion U.S. legal gaming sector. With bipartisan corrective bills already filed and heavyweight casino lobbyists mobilizing, repeal before the 2026 filing season remains plausible. Until then, bettors and operators must adapt to higher phantom-income exposure, possible paperwork relief on smaller slot jackpots, and a patchwork of state conformity rules.
