‘Big, Beautiful Bill’ potentially very bad for poker (players) in the US + STAY ON TOPIC!!
This makes Black Friday look like a children’s birthday party.
There’s no chance this passes right? It would
Seems, really ****ed up for MTT grinders, but would be interesting to see some real life numbers from an MTT grinder to see how bad it really is.
For entertainment purposes obviously:
Let's say there is a grinder who for 2024 had 53k in poker mtt profits. My understanding of how this person's accountant handles his taxes is, they take his profits (the times he cashes in a tournament) and deducts his losses (the times he doesn't cash in a tournament/cashes in a tournament for less than he bought in for), and he pays taxes on his net profits. So in 2024, his cashes were +276.12k and his non-cashes were -223.08k.
But with the new law, he can only deduct 90% of his losses. So he would have had 276.12 in cashes against only 200.77k in losses, meaning he would owe tax on 75.35k in "profits" even though his actual profits were only 53k. Let's say his marital status, spouses' earnings, deductions, all that good stuff adds up to his income being taxed at 20% effectively. So he should owe $10,600 in federal tax, but now he'll instead be paying $15,070, a $4,470 or 42% increase.
America tacking on bills and killing poker again. Whowouldathunk.
It's unclear how to avoid politics here, but it's only one party that wants to prohibit gambling and implement Christian theocracy.
It's not America. It's the Republican party who about a third of Americans vote for. UIGEA was a Republican law as is this. As an American who used to enjoy the freedom online poker created, I could never vote for them. Maybe Democrats would have killed online if given the chance, but they didn't make the rules.
What's really messed up is this is straight up a sin tax as you pay tax just for the act of gambling even if you lose. Otherwise honest winners pay 10% more.
For entertainment purposes obviously:Let's say there is a grinder who for 2024 had 53k in poker mtt profits. My understanding of how this person's accountant handles his taxes is, they take his profits (the times he cashes in a tournament) and deducts his losses (the times he doesn't cash in a tournament/cashes in a tournament for less than he bought in for), and he pays taxes
Is this a real life example? I get how the math works already - the part I’m curious about are the typical win and loss amounts for different types of professional MTT grinders (lower stakes, mid stakes, higher stakes).
For cash, initially I grossly overestimated the effect of the bill because I thought with all the volume I was putting in, my gross win/loss numbers were much higher than they were in reality (50k/25k)
Could rakeback be a refund of rake? What I mean is that, if you can count rake as a business expense, could rakeback be considered a "refund of business expenses?" So if total rake paid was 40k on a site, and you can say that this 40k was not gambling losses but the cost of using a service, and the service directly gave you 15k back, then couldn't you claim the cost of using the service was 25k? It could like a situation where you buy a plane ticket to go to a tournament or a gto wizard subscription, but you cancel it after paying and the service refunds you. I'm guessing that even for regular businesses, if they place an order and credit the amount, but get a refund, I don't think that this would show up as a business expense and income on their taxes. I'm not sure how it would work for something like high hands, BBBJ or chests, but for something like comps or online rakeback, this could be the case. I know for the U.S. taxes thread, it claims you can't count rakeback as a refund, but I feel like that was more to say you can't understate your gambling winnings by taking rakeback out of earnings, but in this case you would take it out both for both earnings and expenses and net 0. You technically didn't pay rake for the rakeback, you paid it so you can use the service, and you get rakeback not based on chance but on business expenses, and you also didn't risk anything to earn rakeback since you didn't pay anything for it. In another hypothetical, you use a certain shipping service for your goods, and you use it a lot so the shipping company decides to pay you 20% of all fees you paid at the end of each month to make sure it both keeps your accounts from moving to a different company and attracts other accounts you may have with different shipping companies. You wouldn't say this 20% was income generated by your business, you would simply say the cost of using the service was 80% of the original fee, even if at one point you credited them with 100% of the fee.
For the above posters, online mtt regs generally play a lot of tournaments in one day (10-25 if you count reentries), and these would almost always be considered a single session. Not sure exactly how much this would lower the buyins to losses conversion but my guess is around 50% (one temporary measure tournament operators can take is to increase the number of people cashing and reduce higher payouts, although this probably would not be good for attracting amateurs). I think this would also have some effect on those who play bigger fields with smaller chances of net profiting for the day, and those who play much higher buy ins relative to your ABI once in a while as most probably do for tournament festivals or special events, especially if these might have lower expected roi and bigger fields than average. For live, I'm not even sure if buying in on a day 1 and cashing on day 2 can even be considered a single session, which really in any multi-day tournaments your buy ins will always be considered losses.
rake isnt a business expense in the eyes of politicians. Its a gambling expense
"Tournament poker players are required to pay the tournament organizer a “buy-in,” or entrance fee. The casino retains a portion of this amount as an administrative fee, and the remainder goes directly into the prize fund “pot” that will be paid out to the tournament’s winners. The Tax Court in Tschetschot, T.C. Memo. 2007-38, considered tournament poker a wagering activity and treated poker players’ loss of the buy-in as losses from wagering transactions. However, the IRS in Hom, T.C. Memo. 2013-163, conceded that poker entry fees and rake fees (charged per hand to play poker online) were business expenses of a professional gambler. While the Tschetschot and Hom cases are inconsistent, this inconsistency is irrelevant under amended Sec. 165(d). Regardless of the nature of buy-in and rake fees, both are subject to the Sec. 165(d) limitation under the TCJA."
"Continuing the example above, further suppose the online casino rewards my loyalty to the site by crediting my account at the end of 2011 20% of all the rake paid to the site during 2011. My rakeback for 2011 is $100. The rakeback should be treated as if the casino never collected this portion of the rake in the first place, thereby increasing my gambling winnings for the year by $100."
Each tournament is a single session. So one tournament with five entries is a single session, regardless of how many days this one tournament lasts.
OTOH, three tournaments on one day with two entries into all three are three sessions. Again, number of days doesn’t matter.
For someone filing as pro using schedule C it likely doesn’t matter.
Each tournament is a single session. So one tournament with five entries is a single session, regardless of how many days this one tournament lasts.
OTOH, three tournaments on one day with two entries into all three are three sessions. Again, number of days doesn’t matter.
For someone filing as pro using schedule C it likely doesn’t matter.
Doesn't it matter next year (assuming bill passes)? If you played three tournaments for 10$ each in one continuous online session, and you cashed for $30 in one and busted the other two, it would be the difference between logging this as a $30 loss and $30 win rather than a $0 win/loss. I'm guessing no one cared about this until now because it didn't matter before, so every one just labeled each tournament as a single session for simplicity. If each online tournament table counted as a single session even if you played them all at the same time, then every online cash game table would also have to be a single session logged individually. So for a 3 hour play 8 tabling, you would have eight sessions in a three hour period. If you table change or a table breaks and you have to start a new one, you could have 16 or 20 sessions in that three hour period. Same would go for live cash games, if you table changed three times you would have to count your stack every time and record your win/loss for that period.
" Gamblers may net their wins and losses over the course of a session to determine whether that session was a win or loss for income tax purposes. It is not necessary to track every spin of a slot machine and sum all winning spins with all losing spins. It is unnecessary to net wins and losses as you switch from machine to machine. A session means a continuous, uninterrupted gaming session at a single gaming establishment. For example, a gambler arrives at Casino A at 9:00 am and gambles until 11:30 am before stopping to have lunch and drive over to Casino B. During this time, though the gambler plays multiple slot machines on the casino floor, it would be considered a single gambling session. The gambler could then add their net win or loss to their gambling diary or log (more on this later) for that session. When the gambler arrives at Casino B, a new session begins."
Each tournament is a single session. So one tournament with five entries is a single session, regardless of how many days this one tournament lasts.
OTOH, three tournaments on one day with two entries into all three are three sessions. Again, number of days doesn’t matter.
For someone filing as pro using schedule C it likely doesn’t matter.
I heard an interview with Russ Fox the other day where he said for some reason it's the opposite of this. He said each entry is technically a separate session.
Is this a real life example? I get how the math works already - the part I’m curious about are the typical win and loss amounts for different types of professional MTT grinders (lower stakes, mid stakes, higher stakes).
Not sure what exactly you're curious about, but yes those are fairly accurate MTT numbers for one individual. Can't say they are representative for every professional.
Not sure what exactly you're curious about, but yes those are fairly accurate MTT numbers for one individual. Can't say they are representative for every professional.
I’m just curious what the amounts and ratios of wins to losses are for typical pro MTT players who focus on different stake levels (and live vs online) to see whether being an MTT grinder is still feasible under this bill.
A player netting 50K on 300K wins / 250K losses for example gets pretty crushed by this bill for example … or someone at 400K / 300K ( taking a 10K hit, but livable income still)
I think unless you’re already loaded you have to be careful not to end up in a bad tax situation like 1M wins / 900K losses (end up paying over half of income to tax and left with 44k)
I’m just curious what the amounts and ratios of wins to losses are for typical pro MTT players who focus on different stake levels (and live vs online) to see whether being an MTT grinder is still feasible under this bill.A player netting 50K on 300K wins / 250K losses for example gets pretty crushed by this bill for example … or someone at 400K / 300K ( taking a 10K hit, but l
The goal of this type of legislation is to punish people for participation. It will shrink the gambling market from 2027 onward when people have unexpected taxes and begin to care. Republicans don't like gambling and want to kill our industry because it's sinful. We should unite against them for repeatedly trying to nuke poker.
I’m just curious what the amounts and ratios of wins to losses are for typical pro MTT players who focus on different stake levels (and live vs online) to see whether being an MTT grinder is still feasible under this bill.A player netting 50K on 300K wins / 250K losses for example gets pretty crushed by this bill for example … or someone at 400K / 300K ( taking a 10K hit, but l
Different stakes and live or online doesn't matter to the math, all that matters is your buyins and ROI. I would estimate that most full time MTT players will see a 30-40% increase in their federal tax bill, as illustrated in my example.
I can't imagine the bill in Congress even gets put to a vote, even if it's bipartisan
I can't imagine the bill in Congress even gets put to a vote, even if it's bipartisan
It passed more than 2 weeks ago prior to the July 4th deadline set by Trump. It goes into effect next year. Every single Democrat voted against it, while Republicans were nearly unanimous in support.
im so dumb, i thought you get taxed on your losses too, is that true? or am I that dumb?
Different stakes and live or online doesn't matter to the math, all that matters is your buyins and ROI. I would estimate that most full time MTT players will see a 30-40% increase in their federal tax bill, as illustrated in my example.
ROI won't matter if you're following the letter of the law. 2 people can have the same ROIs on the same buy ins and end up with 2 different tax bills. Someone with a few big cashes and tons of losses will owe more than someone with a lot of small/medium sizes cashes and less losses if the buy in and net profit are the same.
ROI won't matter if you're following the letter of the law. 2 people can have the same ROIs on the same buy ins and end up with 2 different tax bills. Someone with a few big cashes and tons of losses will owe more than someone with a lot of small/medium sizes cashes and less losses if the buy in and net profit are the same.
Wut? Both ROI and Taxes are percentage based. If someone has the same ROI on the same $$$ of buy ins they will be taxed the same. If you were talking about stakes being played I can see where you are coming from but why does that matter? The ratio stays the same regardless.
Wut? Both ROI and Taxes are percentage based. If someone has the same ROI on the same amount of buy ins they will be taxed the same.
Someone buys into a 1k event and hits for 600k profit. He then buys into five 100k events and has no cashes.
He has netted 100k
But with the new law he can only write off 90 percent of his 500k in losses so he has to pay taxes on 150k..
Someone else also buys into 500k worth of events. He doesn't cash in 300k of them. In the other 200k worth he cashed for 600k.
He also nets 100k.
But he has 400k in wins and 300k in losses. He can deduct 270k in losses from his 400 k in wins so he pays taxes on 130k.
Same thing would happen in sports betting or anything other form of gambling.
Someone hits some crazy parlay and then loses most of it back one one bet has a higher tax bill than someone who nets the same profit on the same amount wagered but does so hitting 55 percent of their -110 bets.
Someone buys into a 1k event and hits for 600k profit. He then buys into five 100k events and has no cashes. He has netted 100kBut with the new law he can only write off 90 percent of his 500k in losses so he has to pay taxes on 150k..Someone else also buys into 500k worth of events. He doesn't cash in 300k of them. In the other 200k worth he cashed for 600k.He also nets 100k.B
Wait, both players have 500k losses yearly and 600k wins. It should be the same itemized yes? Please correct me if I am wrong. Also, example one is technically 501k losses given that he bought in for that extra 1k so he would be owing more. Also, aren't you a brit?
