- The 2026 World Series of Poker is the first held since the 90% cap on gambling loss deductions took effect Jan. 1.
- The change can create “phantom income,” meaning players who break even or lose for the year can still owe federal tax.
- Early high-stakes turnout is down, with one $5,000 event drawing 570 entries this year against 673 in 2025.
- Three bipartisan repeal bills remain stuck in Congress, and the IRS has begun writing rules to enforce the cap.
LAS VEGAS – The biggest poker festival of the year is underway on the Strip, and for the first time its players are competing under a tax change that can leave them owing money on winnings they never kept.
A provision in the One Big Beautiful Bill Act, signed into law July 4, 2025, rewrote the way the federal government treats gambling losses. Beginning Jan. 1, 2026, players may deduct only 90% of their wagering losses against their winnings, down from the full 100% offset that stood for decades. The rule that losses cannot exceed winnings still applies on top of the new cap.
The math is the part that has poker professionals alarmed. Win $250,000 across a year of tournaments and lose the same $250,000, and a player can now deduct only $225,000. That leaves $25,000 in taxable income on a year that produced no actual profit, an amount tax professionals have started calling phantom income. The Joint Committee on Taxation has estimated the change will raise about $1.1 billion over eight years.
Reduced Fields At The First High-Stakes Events
The early returns from this summer’s series suggest the cap is already weighing on decisions. Card Player reported that the third event on the schedule, a $5,000 eight-handed no-limit hold’em tournament, drew 570 entries this year, down more than 15% from 673 in 2025. The prize pool fell from $3.7 million to $2.6 million as a result.
Some of the game’s biggest names are scaling back. Erik Seidel, a 10-time bracelet winner and Poker Hall of Famer, signaled he would consider semi-retirement when the change was announced, and this year confirmed he is playing a reduced schedule because of the tax. The margins in professional poker are already “really, really thin,” Seidel has said, arguing that even elite players cannot absorb the added burden.
The decline is not necessarily the work of the tax alone. A softer stretch of Las Vegas visitation, the spread of solver-driven strategy that has pushed some recreational players away, and the re-entry format common at these events can all move field sizes. The 90% cap arrived alongside those pressures, not in a vacuum.
Three Repeal Bills, No Movement
Lawmakers from both parties have tried to undo the provision, so far without success. Rep. Dina Titus, a Nevada Democrat whose district covers much of Las Vegas, introduced the FAIR BET Act with Rep. Ro Khanna shortly after the law passed; it would restore the full 100% deduction and remains parked in the House Ways and Means Committee. Rep. Andy Barr, a Kentucky Republican, filed the WAGER Act, the first repeal measure led by a Republican. In the Senate, Sen. Catherine Cortez Masto introduced the FULL HOUSE Act, which now has a House companion carried by Reps. Steven Horsford and Max Miller.
None has advanced. The House Rules Committee declined to attach the FAIR BET Act to the 2026 National Defense Authorization Act, and the Ways and Means Committee passed on taking it up at a January markup. Some Republicans have played down the stakes; Sen. James Lankford, who sits on the Finance Committee that drafted the original language, called the drop to 90% “a pretty minor change.”
The dispute matters well beyond the felt for a state where gaming and tourism anchor the economy. Nevada remains one of the few states with legal online poker, and the industry has warned that taxing phantom winnings could push players who play poker in Nevada toward unregulated offshore sites.
IRS Begins Writing The Rules
While Congress stalls, the tax is moving from statute to practice. On April 17, the Treasury Department and the IRS published proposed regulations that would formally limit the wagering-loss deduction to 90% of losses and only to the extent of gains. The proposal signals that the agency is preparing to enforce the cap when players file their 2026 returns next year.
Titus, who met this spring with Seidel to hear how the change is reshaping the professional game, says she remains “optimistic we’ll get it done.” She has noted that any fix must pass by the end of 2026 and that year-end tax packages are the most likely vehicle. For now, the players grinding through the 2026 series in Las Vegas are doing so under rules that can tax them on money that never reached their pockets.