90% limit for gambling losses

Interesting take by a tax filing site about the 90% gambling deduction limit of you're a professional gambler.
https://support.taxslayer.com/hc/en-us/articles/32550494584205-Should-a-Professional-Gambler-File-Schedule-C-or-Report-a-W-2G

They're saying it's 90% deduction of your gambling wins, including gambling expenses.

Tax Year 2026 and Later:
Gambling winnings: $400,000
90% limitation: $360,000
Total documented losses and expenses: $440,000
Allowed deduction: $360,000
Taxable gambling income: $40,000

So no matter what, you owe tax on at least 10% of your gambling wins

Why do we worry about IRS? Most gamblers have a negative win from gambling income. Occasionally, I saw somebody winning more than a million dollars a jackpot, but they often tipped out thousands to the dealer.

Based on what you say above, every gambler must pay IRS a positive tax, no matter they win or lose.

Quote: aceside

Most gamblers have a negative win from gambling income.
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Not in this forum

Quote: aceside

Why do we worry about IRS? Most gamblers have a negative win from gambling income. Occasionally, I saw somebody winning more than a million dollars a jackpot, but they often tipped out thousands to the dealer.
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We worry because we are not 'most gamblers' and many of us work hard not to be 'most gamblers'.

I am average net win over the last five years is $700K and I am having a better than average year in 2026. A strict definition of 'session' could cost me $100K-$200K in extra taxes. I am hoping the FULLHOUSE act passes in time to save my bacon. My plan B is to use a very liberal definition of session.

S.2230 - Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act
https://www.congress.gov/bill/119th-congress/senate-bill/2230

If I managed to have a net win of $200K at table games/bubble craps with no W-2G's, I could play enough slots at $100/spin in a December to accrue approximately $200K in W-2G's and file as a winner just on W-2G's.

Quote: ChumpChange

If I managed to have a net win of $200K at table games/bubble craps with no W-2G's, I could play enough slots at $100/spin in a December to accrue approximately $200K in W-2G's and file as a winner just on W-2G's.
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If you managed to have a net win of $200K at table games/bubble craps with no W-2G's, you could file as a winner just on based on your gambling records.

Nobody at the IRS would question whether you were a winner.

This thread is about the fact that the OBBB currently requires that you can only deduct 90% of your losing sessions.

If you have no losing sessions on your way to your mythical $200K win, then your tax liability will be the same whether the 90% limit gets repealed or not.

Well, no, I would omit any mention of table gaming and only report a similar win accruing in W-2G's by slots. I'd be making a different paper trail of my winnings that has no relation to my actual table winnings, with no session reporting. The 90% rule obliterates session reporting.

Some high limit slot player playing $5,000/spin could rack up $100 million of coin-in (20K spins), and $101 million of W-2G's for a $1 million net win, they would owe tax on $10.1 million of income if they deducted 90% of their losses by session reporting ($101 X .90 = $90.9; $101 - $90.9 = $10.1). Without deducting their losses, they would owe taxes on $101 million of income on the W-2G's alone.

If a similar player was trying to cover for a $200K table win by accruing slot W-2G's, they could play $5,000/spin for 40 spins and lose half of their coin-in because that's how it goes, or they could lower their bet to $100/spin and play 2,000 spins and maybe get 90% of their money back and accrue $150K in W-2G's with a $20K loss; and just report the $150K win on the W-2G's. There'd have to be further balancing to get the W-2G's and the slot losses to match the table game wins minus the slot losses.

To get a $200K table win by session reporting, there may only be a 1% win rate, so that'd be $20 million of losses and $20.2 million of wins. With the 90% rule, that'd be ($20.2 X .90 = $18.18 ; $20.20 - $18.18 = $2.02) a $2.02 million taxable income. I'd be moving that completely off the books in favor of a $200K slot session to rack up W-2G's. This looks like laundering table wins through the slot machines just over 1X to mimic slot wins instead.

Several other first world countries don't tax gambling winnings. I don't know if they tax casinos themselves, but the gamblers should not be taxed. It's a very oppressive form of money control. The slot YouTubers will be in tax court next year because their W-2G's are always off-the-charts. They are all going to get Notices of Deficiency if they aren't millionaires ready to pay off-the charts taxes (gamblers who lost more than 10% may be excepted).


Strategies for Dealing with the IRS: Going to Court - Jones Day - 3.19K subscribers - Mar 15, 2019
https://www.youtube.com/watch?v=JlOgyHyl-_c


What Happens After You File a Tax Court Petition? A Complete Timeline. -
https://bosstaxlaw.com/what-happens-after-you-file-a-tax-court-petition-a-complete-timeline/

What Happens After You File a Tax Court Petition? A Complete Timeline. - Boss Tax Law - 195 subscribers - Nov 5, 2025
https://www.youtube.com/watch?v=yJ6NS9yYEJA


The gamblers will be going to a Federal Appeals Court. Unconstitutional tax on a phantom income would be what I'd start with.

So what is going on in Federal Appeals Court for taxes lately? They are overturning lower court decisions on double taxation for ex-pats living abroad.
The IRS Just Legalized Double Tax For US Expats - Online Taxman - Global Expat Advisors - Oct 7, 2026
https://www.youtube.com/watch?v=fHlpkJTeW04


The US government just won a court case that legalizes double taxation of Americans living abroad — not on paper, in practice. On August 31st, 2026, a federal appeals court ruled that Americans living abroad can be taxed twice, legally, on the same investment income. Once by the country they live in, once by the IRS. And the tax treaty that was supposed to prevent exactly this? The court said it doesn't apply.

If you're a US expat with real investment income — foreign property, meaningful dividends, capital gains — this ruling affects you directly. Most Americans abroad don't even know what happened yet.


The IRS is being overrun by AI routines.

Red Flags The IRS is Looking For in 2026 (NEW AI Audit System) - Online Taxman - Global Expat Advisors - Sep 30, 2026
https://www.youtube.com/watch?v=_9svR_fPJyk

Winners pay anyway.

Most people make up losses without having the required evidences. As much as we clowned on "Professor Slots" (RIP! You're scamming angels now, Jonny!), even he said that people needed to document all play according to tax laws.

Additionally, the gambling industry and everyone who works for it in any capacity is evil. Society should not offer any support to evil industries. In a perfect world, no gambling losses would be deductible.

Quote: itsmejeff

Winners pay anyway.

Most people make up losses without having the required evidences. As much as we clowned on "Professor Slots" (RIP! You're scamming angels now, Jonny!), even he said that people needed to document all play according to tax laws.

Additionally, the gambling industry and everyone who works for it in any capacity is evil. Society should not offer any support to evil industries. In a perfect world, no gambling losses would be deductible.
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Link of his death?