The One Big Beautiful Bill Act (OBBBA) imposes devastating new restrictions on the ability of professional and casual gamblers to deduct their gambling losses.

These changes have resulted in so much outrage from gamblers that Congress may be forced to eliminate the changes before they take effect in 2026.

Casual Gamblers

Casual gamblers—that is, people whose gambling activity does not constitute a business—have long been harshly treated by the tax law.

Casual gamblers report their calculated gambling winnings as “other income” on IRS Schedule 1, line 8b. (Note that this is not net winnings or net income.)

Some gambling winnings are reported to the IRS by the casino or other gambling establishment on IRS Form W-2G. But casual gamblers are supposed to list all their winnings on Schedule 1, whether or not those winnings were already reported to the IRS.

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