Gaming Tax Replace: Federal Developments to Watch

A latest Treasury listening to on gaming-related proposed rules highlighted modifications and issues within the trade together with the brand new wagering loss limitation, larger reporting thresholds, and want for IRS steerage on monitoring beneficial properties and losses. 

New Limitation

Beginning in 2026, gamblers are solely allowed to deduct 90% of wagering losses, after which solely to the extent of beneficial properties. As a consequence, a taxpayer who economically breaks even from wagering exercise might nonetheless have taxable revenue as a result of 10% of losses can be nondeductible. The new limitation was added to the tax code as a part of the One Big Beautiful Bill Act (OBBBA), enacted in July 2025.

While Treasury and the IRS hosted the listening to to get suggestions on implementing the rule, many took the chance to debate its detrimental impacts and push for repeal by Congress. Industry stakeholders have raised issues that the 90% limitation can create phantom revenue and will push playing outdoors of authorized institutions. 

The AICPA and lots of others have supported repeal of the brand new limitation by backing legislative proposals that might restore full deductibility of wagering losses, topic to the extent of beneficial properties, as earlier than. Although no taxpayer ought to assume the rule will likely be repealed, legislative exercise and trade commentary make this an energetic space to look at.

Need for IRS Guidance on Session Methodology

Separate from the 90% limitation, questions stay about how taxpayers ought to measure wagering wins and losses. Many taxpayers and advisors look to a session-based method for sure gaming exercise, however IRS steerage on session methodology is proscribed even for conventional on line casino play. The progress of on-line gaming has intensified that uncertainty as a result of a lot of the prevailing authority doesn’t immediately tackle trendy on-line platforms.

Online gaming might contain steady play, a number of platforms, automated data, frequent deposits and withdrawals, bonuses, and totally different sport sorts occurring shut collectively. Additional IRS steerage would assist taxpayers, return preparers, and gaming operators decide when a session begins and ends, how one can doc session exercise, and the way session methodology ought to work together with the 90% loss limitation if the rule stays in impact.

Updated Reporting Thresholds for Bingo, Keno, and Slots 

The proposed rules additionally included an replace to sure gaming reporting. The OBBBA up to date the final $600 info reporting threshold for the primary time since its inception in 1954! This threshold applies to sure funds on Forms 1099-MISC, 1099-NEC, and sure winnings reported on Form W-2G (with exceptions). For funds starting on January 1, 2026, the brand new reporting threshold for this stuff will likely be $2,000. Additionally, the quantity is listed for inflation starting in 2027 for the primary time ever to keep away from many years of stagnation.

Prior to the OBBBA, playing payout thresholds for bingo, keno, and slot machines adopted regulatory carve-outs of $1,200 for bingo and slots, and $1,500 for keno. Proposed rules affirm that the these thresholds are additionally up to date to $2,000 and can tie to the identical statutory code part as the final framework going ahead, reasonably than sustaining a separate greenback quantity set in rules. 

Recommended subsequent steps

• Maintain detailed data of wagering exercise, together with dates, platforms, sport sorts, deposits, withdrawals, Forms W-2G, and annual account statements.
• Do not rely solely on info returns to find out taxable playing revenue or deductible losses.
• Plan for the brand new limitation however look ahead to potential modifications. 

As the gaming area and associated tax guidelines proceed to evolve, we are going to proceed to watch and talk developments. Reach out to debate how these guidelines might have an effect on your state of affairs.

Published: 07/27/2026

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