Trump Weighs Reversing Gambling Tax in One Big Beautiful Bill Act
President Donald Trump is reportedly considering whether to do away with federal taxes on winnings from gambling. If he does, the administration's ongoing tax reform initiatives would undergo yet another major change.
The One Big Beautiful Bill Act (OBBBA), which includes provisions like no tax on tips and no tax on overtime, has already changed some aspects of the tax code. With millions of Americans participating in gambling each year - including at the best sports betting sites - changes to how winnings are taxed could create broad effects for taxpayers and federal revenue.
Trump fielded questions aboard Air Force One on Tuesday about whether he would support ending the federal tax on gambling winnings. He said he had already backed exemptions for tips, Social Security, and overtime, and added that the gambling proposal was something he would "have to think about," said Trump.
The consideration would sit alongside recently enacted provisions within OBBBA that allow qualifying earners to claim deductions on tipped and overtime pay, some of which took effect retroactively in January 2025.
The fiscal consequences of additional tax cuts remain central to the debate. The Bipartisan Policy Center has projected that OBBBA will raise federal deficits by $3.4 trillion over ten years.
Administration officials have pointed to tariff revenue and foreign investment as potential offsets. However, economists have questioned whether those sources could cover the loss created by eliminating taxes on gambling income.
The broader conversation surrounding gambling taxation has expanded in recent months, and Nevada lawmakers are focused on a related issue created by the OBBBA.
Nevada lawmakers push to reverse the gambling loss deduction limit
Since Trump signed the OBBBA on July 4, Nevada's congressional delegation has been trying to remove a lesser-known provision of the law that limits gamblers' ability to deduct only 90% of their losses against winnings. The change means a gambler could finish the year at break-even yet still owe taxes on income that was never retained.
Both parties have argued that the rule is unfair and should be repealed. Congresswoman Dina Titus said the provision affects anyone who gambles and forces taxpayers to account for "phantom money," said Titus. Her post drawing attention to the rule gained significant traction online.
Support for the repeal is bipartisan, with nine Republicans joining Democrats as co-sponsors of the FAIR Bet Act. Backers include Nevada Rep. Mark Amodei, House Ways & Means Chair Jason Smith of Missouri, and House Gaming Caucus Chair Guy Reschenthaler of Pennsylvania.
However, the repeal has not reached the floor. Lawmakers have noted reluctance among Republicans to revisit the broader tax package, though a standalone measure or an attachment to another bill remains possible.
The timing offers some flexibility because the provision does not take effect until 2026, meaning Congress has until the end of next year to act. Industry groups and casino operators have encouraged a fix, citing potential risks to compliance and tourism if the rule remains in place.
