The "Big Beautiful Bill" promoted by U.S. President Trump recently passed the Senate narrowly, but a tax provision known as the "Gambler's Killer" has sparked huge controversy. The bill could not only severely impact high-stakes gamblers but also affect industries such as American horse racing that rely on gambling revenue.
According to the Senate version, Section 70114 of the bill explicitly states: "Extend and revise the tax deduction limit for gambling losses." Specifically, gamblers can only deduct up to 90% of their losses each year in the future. Under the current system, gambling losses can be deducted 100% as long as they do not exceed annual profits.
NBC Sports vividly explained: If someone wins $100,000 and loses $100,000 in a year, theoretically, they should not be taxed. But under the new rule, only $90,000 of the loss can be deducted, and the remaining $10,000 is considered "net profit," which is still taxable—even though it's not actual income.
This change is particularly deadly for frequent professional gamblers. Renowned poker player Phil Galfond warned on X (formerly Twitter): "If I win $5.2 million and lose $5 million in a year, I actually only make $200,000. But under the new tax system, I can only deduct $4.5 million in losses, and I have to pay tax on a 'net gain of $700,000'! It means you earn $200,000, but have to pay far more than that in taxes, essentially 'paying' to work."
He bluntly stated: "Under this tax system, no one can be a professional gambler in the U.S., and the entire industry chain will collapse."
People in the horse racing industry have also expressed similar concerns. Tom Rooney, chairman of the National Thoroughbred Racing Association (NTRA), stated that this tax reform would severely impact the horse racing betting market, especially for regions lacking additional financial subsidies. "We are currently pressuring Congress along with several industry organizations, including the American Gaming Association, hoping to withdraw this provision."
"Everyone needs to understand that our industry is sustained by people who love horse racing and are willing to bet. If they are hindered by taxes and stop participating, it will directly hit the entire industry."
Earlier versions of the bill in the House of Representatives contained some tax provisions unfavorable to horse racing, which were successfully removed after lobbying. However, due to time constraints, it is almost impossible to amend the new gambling tax regulations before the final vote.
Rooney bluntly stated: "The reason they reduced the deduction ratio from 100% to 90% is simply because of financial pressure, trying to 'find money' everywhere." The bill also includes large-scale tax cuts, mainly benefiting the wealthy class, and significantly increases military and immigration enforcement budgets. To this end, the government plans to cut social benefits such as health insurance and child food subsidies, but it is still difficult to bridge the fiscal gap.
Independent analysis indicates that the bill will increase U.S. federal debt by up to $3.3 trillion over the next ten years.
