The new law caps gambling loss deductions at 90%, down from the current full deduction. This change affects both American players and foreign tourists, resulting in situations where people may owe taxes despite losing money overall.

Under current rules, someone who wins $100,000 but loses $100,000 pays no gambling taxes because the losses completely offset the winnings. The new system means that same person would owe taxes on $10,000 of income despite breaking even.

Congress put this provision in legislation called the “One Big Beautiful Bill” that lawmakers say will generate $1.1 billion in extra tax revenue through 2033. Professional gamblers and poker players have fought back hard against the change and warn it could force them to find opportunities in other countries.

Foreign visitors to US casinos already deal with complicated tax rules when they gamble. People who are not US residents must pay a flat 30 percent tax on casino winnings, and most cannot deduct any losses, depending on whether their home country has a tax agreement with America.

UK and European visitors frequently face delays when collecting large casino payouts, particularly at crowded Las Vegas properties during peak periods. Many players now prefer the fastest payout online casinos, which process withdrawals faster than traditional casino operations. These online platforms typically complete transactions in hours rather than the several days that casino cashiers may need during peak seasons.

Casinos must submit reports to the Internal Revenue Service when someone wins more than certain amounts, such as $1,200 from slot machines or $5,000 from poker tournaments. The $1,200 slot machine limit has not changed since 1977, despite decades of inflation and growth in the casino business.

The new rules change how much money casinos must hold back from winnings and how they handle tax paperwork, but the basic 30 percent tax rate for foreign visitors stays the same.

For UK visitors and other international travelers without tax treaties, the impact proves particularly difficult. These gamblers cannot write off any losses and must pay the full 30 percent tax on all winnings.

Tax experts warn that tourists visiting Las Vegas who break even on gambling could receive unexpected tax bills in 2027. The change requires more detailed recordkeeping and could push some players toward unregulated offshore operators to avoid US tax complications.

The new law creates challenging scenarios for different types of gamblers. A recreational player who wins $50,000 but loses $60,000 would previously owe no taxes, but now faces liability on $5,000 of phantom income after the 90 percent loss cap.

Professional players get hit the hardest because they work with tight profit margins. A player earning $200,000 annually might have $3 million in winnings offset by $2.8 million in losses, but the new rule would tax them as if they earned $480,000.

Casino industry representatives expressed disappointment with the provision, which many lawmakers admitted they barely noticed while passing the broader tax package. The American Gaming Association praised other aspects of the legislation but indicated it would work to modify the gambling loss restrictions.

Nevada lawmakers have introduced the FAIR Bet Act in Congress, hoping to restore full loss deductions before the 2026 start date. Representatives Dina Titus of Nevada, Ro Khanna of California, and Troy Nehls of Texas have backed the legislation, but its chances remain unclear.

Tax advisors recommend international visitors who are planning trips to US casinos after 2026 to assume that any winnings will be heavily taxed and that losses will offer little relief. The new regulations create more complex tax filings for all players, which makes detailed record-keeping essential for anyone who gambles at US casinos.

The changes show how the government wants to close tax loopholes and bring in more federal revenue. Critics say lawmakers slipped the provision into the bill without public discussion, while supporters argue it fixes unfair deductions that mostly helped big-money gamblers.

Travelers who plan to visit US casinos should prepare for these tax changes before the 2026 start date. The rule represents a significant shift in how America handles gambling income, ending decades of tax-neutral treatment for casino activities.