This content was AI generated based on the original article published on https://www.pokernews.com/news/2026/07/kondler-associates-big-beautiful-bill-90-gambling-losses-51976.htm. All credits for the original reporting belong to them.
The IRS held an open hearing on Friday, July 17, 2026, addressing the controversial 90% gambling loss deduction rule set to take effect under the Big Beautiful Bill (BBB) for the 2026 tax year. Speakers included Nevada Representative Dina Titus, tax attorney Joshua Hamlet of Clarity Tax Counsel PLLC, Mike Vanaki of the American Gaming Association, Gary Kondler of Kondler & Associates, and several amateur and professional gamblers.
A central concern raised throughout the hearing was the concept of “phantom income,” which refers to taxable amounts that gamblers never actually receive. Under the new cap, bettors who finish the year at a net loss could still owe taxes, since only 90% of losses can offset winnings.
Representative Titus emphasized the economic stakes, noting that the domestic gaming industry supports 1.8 million jobs, $104 billion in wages, and $53 billion in tax revenue for state and local governments. Several speakers warned that despite strong 2025 performance, the industry could see declining participation as gamblers grow wary of the new tax exposure.
Although the session method offers an alternative approach to reporting gains and losses, panelists noted it lacks clear guidance at the state level and could invite increased scrutiny and correspondence from the IRS.
Kondler & Associates pointed to existing executive orders, arguing the BBB provision may conflict with regulatory goals of predictability and economic improvement. The firm also raised unresolved questions about defining a “session” and determining liability for the 10% loss reduction in partnership arrangements.
Speakers unanimously called for a full repeal of the 90% cap, restoring 100% loss deductibility. They argued the administrative costs of enforcing the rule would outweigh any revenue gained, unfairly burdening compliant taxpayers engaged in a legal activity.
