The battle against the new tax regulation affecting poker and gambling players in the United States continues to add chapters. On July 17, the Internal Revenue Service (IRS) – the entity that regulates taxes – held a public hearing to listen to specialists, industry representatives, and players about the controversial rule that limits the deduction of gambling losses to 90%, a measure that will begin to apply during the 2026 tax year.
During the hearing, one idea was repeated over and over again: the concept of “phantom income.” In simple terms, it means that a player could end up paying taxes on money that, in practice, they never won. This happens because the new rule prevents 100% of losses from being deducted against winnings, even when the player’s annual result is negative.
The view of players and experts
Among those who spoke were Congresswoman Dina Titus
Titus recalled that the gaming industry in the United States generates 1.8 million jobs, more than 104 billion dollars in wages, and approximately 53 billion in state and local taxes. According to the participants, such a regulation could affect these numbers by discouraging player participation.
Poker in the United States is in a legal all-in that, if it goes wrong, could be one of the industry’s toughest bad beats.
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Kondler & Associates also questioned the lack of clarity of the rule. One of the main points was the definition of the so-called “session method,” an alternative for calculating gains and losses that still presents many doubts about its practical application. In addition, they raised questions about how the 10% reduction should be applied in agreements where several players share percentages of the same investment.
The firm also argued that the new regulation could go against principles established by US executive orders, which require rules to be clear, predictable, and generate economic benefits. In their opinion, the opposite will happen: more administrative burden for the IRS, more costs for taxpayers, and a much more complex system to administer.
Latin Americans watch with interest
From a Latin American perspective, the case is being followed with attention. Many players from the region travel each year to compete in the World Series of Poker (WSOP) and other major festivals in the United States. An increase in the tax burden could reduce international participation and make the dream of competing on the world’s main stages even more expensive.
At the close of the hearing, all speakers made the same request: to restore the 100% deduction of gambling losses, completely eliminating the 90% rule. Now the decision rests with the IRS, while the poker community hopes that one of the most questioned measures of recent years does not end up becoming a harsh blow to the entire industry.
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Source: Pokernews.com
