The new tax policy impacts high rollers, and American gambling companies may be forced to increase VIP rewards.

This summer, the U.S. sports betting industry is facing dual tax pressures at the state and federal levels, which may force operators to reevaluate their VIP incentive strategies to retain high-value customers.

Illinois took the lead by passing the first U.S. special tax law targeting sports betting, followed by a new tax amendment proposed by former President Trump that further exacerbated the situation. The amendment eliminated the 100% loss deduction available to gamblers, reducing it to a maximum of 90%, causing widespread concern among gaming operators. Some operators have announced that they will pass some of the costs onto customers, and VIP teams are also exploring new incentive schemes to retain top players.

Despite high rollers accounting for less than 1% of total customers, they contribute the majority of revenue. For example, in March 2023, Fanatics' market share in New Jersey temporarily exceeded that of DraftKings, widely believed to be related to the massive losses of a super high roller. According to The Wall Street Journal, PointsBet's revenue from VIP customers, who make up only 0.5% of their user base, accounts for about 70%.

To attract these "whales," betting companies offer benefits including high betting limits, rebates, meeting sports stars, and concert tickets. Recently, a major operator considered arranging an exclusive dinner experience with NBA players for VIPs.

However, competing with traditional sports betting are prediction market platforms like Kalshi, which offer lower tax burdens. This platform allows users to place bets around sports events and enjoys more attractive tax treatment under current federal tax law. For example, a user bet $660,000 on golfer Colin Morikawa during the Masters, and although he lost $30,000, the overall tax environment remains more favorable to players.

In the UK, gambling regulators have tightened VIP program rules since 2020, requiring mandatory affordability assessments and source of funds checks. As a result, the number of VIP users has significantly dropped by 90%. This trend has caught the attention of U.S. legislators, and this year, New York State Assemblyman Tongko and Connecticut State Senator Blumenthal proposed the SAFE Bet Act, which also includes restrictions on VIP incentive behavior.

Meanwhile, to resist the tax injustice caused by the "Trump Act," Nevada State Senator Titus initiated the Fair Betting Act, advocating for the restoration of gamblers' rights to 100% loss deductions. The bill has received bipartisan support and will hold a hearing in Nevada this week.

In the context of stricter regulations and rising tax burdens, U.S. betting companies may enter a new phase of "increasing VIP benefits and seeking tax havens," and the direction of industry policies will continue to affect the future market landscape.