Key Moments:
- A proposed tax rule would limit gamblers to deducting only 90% of their losses, instead of the previous 100%.
- DraftKings CEO Jason Robins criticized the rule change, questioning its rationale.
- DraftKings recently posted record revenue, net income, and EBITDA in its latest quarterly results, driving a stock rise of over 3% in after-hours trading.
Changes in Gambling Tax Policy
A newly proposed gambling tax regulation in President Donald Trump’s megabill has raised concerns among industry leaders. Under this change, gamblers would be allowed to deduct only 90% of their losses, compared to the previous policy that enabled them to deduct losses in full against their winnings. This alteration means that, for example, a bettor who wins $1,000 and loses $1,000 could now deduct only $900, resulting in $100 of taxable income.
Industry Reaction and Legislative Engagement
Jason Robins, CEO of DraftKings, has publicly questioned the logic of taxing apparent income that is not truly earned, telling CNBC, “If you can’t deduct all your losses, you know, how does that make sense that you pay income tax on something that’s not actually income.” Robins further characterized the adjustment as “a very strange change” and noted it may have been introduced due to a “technicality” tied to the Byrd Rule, which restricts non-revenue-related provisions in reconciliation bills. He indicated that DraftKings is actively engaging with lawmakers with hopes to amend the provision.
Yikes.
Senate Amendment to the Big Beautiful Bill =
You get taxed on more than you earned from gambling, even if you netted $0 (or less!).Here's how it works and what you can do…
The change
If it passes in this form, starting in 2026, gambling losses (and expenses) will…
— Phil Galfond (@PhilGalfond) July 1, 2025
DraftKings’ Financial Performance
DraftKings reported record-breaking revenue, net income, and EBITDA in its most recent quarterly earnings, announced after the market closed on Wednesday. The company attributed its strong results to robust customer engagement, successful customer acquisition, an improved sportsbook hold percentage, and favorable outcomes in sportsbook operations. As a result, DraftKings’ stock gained more than 3% in extended trading following the earnings announcement.
Outlook on U.S. Sports Betting Legislation
In addition to commenting on tax matters, Robins discussed the evolving landscape of online sports betting across the United States. He observed that there has been overall progress and suggested that legalization efforts may extend to additional states in the future. “I can’t imagine a world where you can, you know, bet in 30, 40 plus states, and California is not one of them, and Texas is not one of them,” Robins said. According to the American Gaming Association, online sports betting is currently legal in 34 states.
| Key Financial Metrics | Recent Performance |
|---|---|
| Revenue | Record reported |
| Net Income | Record reported |
| EBITDA | Record reported |
| Stock Price Movement | Up more than 3% after results |
- Author
Daniel Williams
