Under new tax laws that went into effect on January 1, 2026, gamblers will have to pay taxes on some of their winnings even if they break even or lose money overall for the 2026 tax year.
The new tax law enacted by President Donald Trump’s “One Big Beautiful Bill” lowered the cap on deductions for gambling losses to 90%. Previously, gamblers could deduct 100% of their losses up to the amount of their winnings, meaning they only paid taxes on net winnings.
Now, if an online casino player wins $5,000 in 2026 and also loses $5,000, they can only deduct $4,500 (90% of $5,000) from their winnings for tax purposes. They will have to pay taxes on the remaining $500 in winnings, even though they broke even on their gambling for the year.
