What gamblers should know about laws that change in 2026
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Gambling may not be the same for many Americans next year because of new tax laws.
The big picture: The new gambling laws on the state and federal level for 2026 could directly impact betters nationwide and how much income they claim on their taxes in the years to come.
- The new laws come as sports gambling and prediction markets have become massively popular nationwide, replacing the stock market in many states for investors.
- There has been pushback against gambling amid national scandals, which has led to some statewide bans that limit where and how bettors play their chips.
Here's what gamblers should know for 2026.
OBBBA tax law change for gambling
Context: President Trump's One Big Beautiful Bill Act (OBBBA) includes a provision that could see betters lose money during tax season even when they win at the poker table.
- The act says gamblers can deduct from their winnings an amount equal to 90% of their losses for a tax year.
- This means that a hypothetical gambler who wins $100,000 but loses $100,000 would have to pay taxes on $10,000 of what some consider to be "phantom income."
- In the past, gamblers could deduct all their losses from their declared income.
What they're saying: This new provision hasn't sat well with all gamblers.
- "There could be scenarios where folks have a tax liability that matches or exceeds the amount that they earn," Garrett Watson, director of policy analysis at the Tax Foundation, told Axios last fall.
The other side: The new rule could raise $1 billion for the government, according to estimates from the Joint Committee on Taxation, as shared by the Congressional Budget Office.
Will Trump's gambling law change?
Members of Congress already moved to change the provision to little avail.
- Rep. Dina Titus (D-Nev.) introduced the FAIR Bet Act last fall, which would revert the gambling deductions to 100% again.
- Reps. Ro Khanna (D-Calif.) and Troy Nehls (R-Texas) supported the legislation, but the effort was stalled by Republicans.
- "This is an attack on freedom, fun, and sports," Khanna wrote on X.
New state laws for gambling in 2026
What's next: Several states made changes in 2025 for their gambling laws, including bans on websites that give users access to play poker for "sweepstakes" coins (which can be converted into real money).
- New York recently added a ban on promoting sweepstakes gambling.
- New Jersey also enacted a ban on sweepstakes gambling.
- California has a new ban on sweepstakes gambling that goes into effect on Jan. 1, 2026.
- Michigan, Connecticut and Montana are also considering legislation that might impact gambling and prediction markets.
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