President Donald Trump has indicated he could look at whether or not playing winnings ought to proceed to be taxed on the federal degree, including a brand new level of debate to broader conversations surrounding U.S. tax coverage. His remarks surfaced as lawmakers, trade figures, and regulators consider present IRS guidelines, upcoming modifications to loss deductions, and the fiscal implications tied to gaming exercise throughout the nation.
Trump’s Comments Renew Attention on Federal Gambling Tax Rules
While talking with reporters aboard Air Force One, Trump was requested whether or not he would help eradicating the federal tax utilized to playing winnings. He referenced earnings classes already exempt beneath just lately enacted regulation and left open the potential of increasing these exclusions. “We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime,” he mentioned. “No tax on gambling winnings, I don’t know. I’m gonna have to think about that.”
In one other trade, he added, “No tax on gambling winnings? I don’t know about that,” and concluded with, “I’m going to have to think about that.” The dialog ended when he suggested these onboard to put together for turbulent air.
The feedback comply with the passage of the One Big Beautiful Bill Act (OBBBA), which launched vital modifications to federal taxation by exempting suggestions and additional time pay and increasing deductions for sure Social Security and retirement-related earnings. Several of those changes took impact in early 2025. Projections from coverage analysts estimate the act might add US$3.4 trillion to the federal deficit over the subsequent ten years.
Any modifications to federal taxation on playing winnings would have an effect on tens of millions of Americans. Industry information point out that almost 60% of adults participated in some type of playing inside the previous 12 months. About 30% visited bodily casinos, whereas 21% positioned sports activities bets. Commercial playing income reached US$110.3 billion in 2024, supported partially by robust progress in sports activities betting and on-line gaming merchandise.
According to Fox Business, beneath present IRS tips, all playing earnings have to be reported on Form 1040. A W-2G is issued when winnings exceed US$600 in sure conditions, and when payouts attain US$5,000 or extra, operators usually withhold 24% for federal earnings tax. The withholding fee could rise to 28% or 31% if a winner doesn’t present a Social Security quantity. The IRS states that playing earnings “includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos,” and that prizes comparable to journeys or autos are additionally taxable. Loss deductions are permitted solely up to the quantity of claimed playing earnings.
New guidelines adopted earlier within the 12 months will additional limit deductions starting in 2026 by limiting losses to 90% of playing earnings, in contrast with the earlier full-offset strategy. These modifications have triggered concern amongst skilled gamers, together with high-stakes bettors and poker gamers who repeatedly expertise volatility in annual outcomes. Some, comparable to Poker Hall of Famer Erik Seidel, have publicly indicated the revised guidelines could considerably affect their capacity to preserve full-time play.
Policymakers Weigh Possible Consequences
Economists, tax students, and trade advocates have already began evaluating what eliminating the federal tax on playing winnings may imply for presidency funds. While the IRS doesn’t individually publish the full income gained from gambling-income taxation, analysts recommend the quantities concerned are substantial. With industrial playing income exceeding US$100 billion yearly, even modest efficient tax charges translate into a number of billion {dollars} in federal income.
Some critics argue that easing tax necessities on winnings might intensify public-health issues round playing, notably amongst youthful male bettors who make up a rising share of on-line wagering exercise. Others word {that a} federal exemption might make regulated play extra interesting when put next with offshore platforms, although such a change wouldn’t have an effect on operators’ company taxes.
Meanwhile, efforts in Congress proceed concerning one other gambling-related challenge: the rule limiting deductible losses to 90%. Representative Dina Titus has proposed laws to reverse the change and has tried to connect it to different payments, however the measure has not superior. Members of the gaming group and commerce organizations have additionally been assembly with lawmakers to draw consideration to the difficulty earlier than the legislative 12 months concludes.
For now, Trump’s remarks don’t sign a proper coverage proposal, and no draft laws has been launched. Any concrete plan would require congressional approval, and financial analysts would wish to assess the income affect earlier than debate might start.
