A significant shift is coming to the world of American gambling in 2026, potentially diminishing winnings for many. A recently enacted federal law, stemming from a sweeping piece of legislation, is poised to alter how taxes are calculated on gambling income.
For years, gamblers in the US have been able to offset their winnings with their losses when filing taxes, effectively only paying on net profits. This long-standing practice is about to change, drastically reducing the amount of losses that can be claimed.
The new law limits the deduction for gambling losses to 90% of winnings. Imagine winning $10,000 but also losing $10,000 – under the new rules, you’ll be taxed on $1,000, effectively shrinking your take-home pay.
This change is projected to generate approximately $1 billion in additional revenue for the US government. While a boon for government coffers, it represents a potential financial setback for those who enjoy wagering.
The alteration has sparked immediate resistance from gambling advocates across the nation. Representative Dina Titus of Nevada has spearheaded efforts to reverse the change with the introduction of the FAIR Bet Act, aiming to restore the 100% deduction for losses.
Titus argues that the new law could inadvertently push gambling activity into unregulated, black market channels. These illegal operations avoid taxes, lack oversight, and offer no support for responsible gaming.
Beyond the federal changes, a wave of new gambling legislation is sweeping across individual states. Several states are actively cracking down on sweepstakes casinos, particularly those utilizing dual-currency systems.
New York has banned the promotion of sweepstakes gambling, while New Jersey has outlawed the games entirely. California’s ban took effect at the start of the new year, and Indiana has begun hearings following a similar prohibition last year.
The scrutiny isn’t limited to sweepstakes. States like Michigan, Connecticut, and Montana are also evaluating legislation concerning prediction markets, signaling a broader reassessment of gambling regulations nationwide.
As 2026 approaches, American gamblers face a more complex tax landscape and a tightening regulatory environment. The coming year will be crucial in determining whether the FAIR Bet Act gains traction and mitigates the financial impact of the new federal law.
