Key Moments:
- On January 1, 2026, new federal tax rules will restrict gamblers to deducting only 90 percent of losses from winnings.
- Dana White sent a letter to President Trump, criticizing the new tax law’s impact on bettors and the legal gaming sector.
- Lawmakers and industry groups have rallied behind repeal efforts, citing potential threats to gaming jobs and local economies.
OBBBA Tax Rule Reshapes Gambling Deductions
Significant changes to federal gambling tax deductions are causing widespread concern across the industry. Under the One Big Beautiful Bill Act (OBBBA), starting January 1, 2026, gamblers will be limited to deducting only 90 percent of their losses from their taxable winnings, a reduction from the prior 100 percent threshold. This rule affects professional gamblers, poker players, and sports bettors, particularly those who place high-volume bets with modest net returns. Critics assert that these changes may compel bettors to pay taxes even when their overall gambling activities result in no profit or net losses, a phenomenon described as “phantom income.”
Industry observers have expressed fears that the reduced deduction could drive players to unregulated offshore betting sites that bypass Internal Revenue Service (IRS) oversight. While the Joint Committee on Taxation estimates the provision could raise $1.1 billion over a ten-year period, stakeholders argue it threatens the viability of regulated gaming and could undermine the broader industry.
Dana White’s Appeal to President Trump and Congress
UFC President Dana White has emerged as a prominent voice against the OBBBA deduction limits. In a letter addressed to President Trump, White expressed his position through The Closing Line, criticizing the latest changes as unjust and describing them as a financial penalty for bettors. He highlighted the negative effects on both consumers, who may have to pay taxes even on wagers that result in losses, and on casino workers, who could see decreased tips and reduced earnings as a result of lower betting volumes. White specifically referenced President Trump’s “No Tax on Tips” stance, drawing attention to the broader impact on employment within the legal casino industry.
White’s advocacy coincided with the start of Congressional hearings on sports betting tax policy, strengthening the movement to reconsider the gambling loss deduction cap. For the UFC and its leadership, this is not a mere policy debate but a matter closely tied to fan engagement and the integrity of the legal sports betting market. White emphasized concerns that stricter financial penalties could drive fans away from legal platforms or into offshore markets outside of US regulations.
Legislative Response: Efforts to Restore Gambling Loss Deductions
Federal lawmakers have put forward multiple bills aimed at reversing the 90 percent loss deduction cap. The FAIR BET Act, introduced by Representative Dina Titus of Nevada, seeks to fully restore the 100 percent deduction standard for gambling losses. Proponents warn that the cap threatens the vitality of local economies dependent on gaming, as well as jobs related to both casinos and tourism. Despite gaining attention and bipartisan support, these efforts have faced challenges making progress in the legislative process.
Other legislative proposals, including Steven Horsford’s FULL HOUSE Act and Andy Barr’s WAGER Act, underscore the wide concern among states that rely on gaming revenue. The possibility of hearings before the House Ways and Means Committee has raised hopes for meaningful action.
| Legislation | Lead Sponsor | Primary Goal |
|---|---|---|
| FAIR BET Act | Dina Titus | Restore 100% deduction for gambling losses |
| FULL HOUSE Act | Steven Horsford | Remove 90% deduction cap |
| WAGER Act | Andy Barr | Remove 90% deduction cap |
Support Builds for Repeal Initiatives
Dana White’s public stance has energized calls to overturn the deduction limits. Representative Dina Titus acknowledged White’s advocacy and emphasized ongoing bipartisan support for repeal. Senator Catherine Cortez Masto added her voice, stating the change harms not only players, but also businesses and workers within the gaming and tourism sectors.
“I have a bipartisan bill to reverse the nonsense tax on gambling losses for exactly this reason: it’s hurting players, our gaming and tourism industry, and the workers who count on them for their livelihoods. I agree with Dana White, the President needs to join us and fix this…” — Senator Cortez Masto (@SenCortezMasto), May 13, 2026
The American Gaming Association also credited White’s advocacy for drawing attention to the issue, maintaining that reinstating the full deduction is vital to the health of the legal gaming industry.
“The letter sent by UFC President Dana White underscores the AGA’s ongoing efforts to work with Congress to restore the 100% gambling loss deduction. Restoring the deduction is critical not only for bettors, but for the businesses and jobs supported by the legal gaming ecosystem.” — American Gaming Association (@AmericanGaming), May 13, 2026
Next Steps in the Policy Battle
As the House Ways and Means Committee prepares for hearings on gambling-related tax changes, the debate is set to reach a critical juncture. Industry leaders, experts, and policymakers are expected to provide testimony. Thanks to persistent lobbying by stakeholders and heightened awareness initiated by figures like Dana White, the possibility of policy revision remains in focus. While uncertainty persists regarding full repeal, the evolving discussion reflects mounting pressure for adjustment.
- Author
Daniel Williams
