‘Big, Beautiful Bill’ potentially very bad for poker (players) in the US + STAY ON TOPIC!!

I just checked out some hypothetical numbers for my taxes:

A. Before the 90% Cap Bill:

Assumes
240K Total Wins
150K Total Losses
47K Poker Expenses (travel, hotels, coaching, health insurance, other)

Taxable Income: 43,000

B. Applying the 90% Cap Bill

.9 Rule
240K Wins
135K Ded. Losses
42.3K Ded. Expenses

Taxable Income - 62,700

WTF?

What's the current odds of this bill getting reversed by year end?

Someone correct me if I'm wrong, but I think you can still deduct 100% of your expenses.

My guess is that it's unlikely that this gets repealed by congress as they're basically impotent and can't get anything done.

I think someone will challenge this in court, and our best hope is that the courts throw it out on the grounds that you can't tax people for more than they're actually making.

I am pretty sure losses plus expenses are both limited to 90% of actual or 100% of wins which ever is less

It was 63% to be repealed when it passed however now the odds are 33% to be repealed. Not looking good boys. These blood suckers are coming for our crumbs

https://polymarket.com/?_q=Gambling

Polymarket

Polymarket | The World's Largest Prediction Market

Yeah, we better all just quit gambling. I know that's my play, along with the prob 25, 000 other pro APs who have zero chance of coming within a rounding error of their current EV in any other career within a decade.

They project it'll raise $1.1 billion. What's actually gonna happen is it's gonna cost them $10B/yr in people who now literally can't pay taxes any longer and another $10B hiring the 25, 000 IRS agents you're gonna need to squeeze a single cent out of a cohort who's been in BTC since 2013 and makes Mark Rich look like he lost the money laundering event at the Special Olympics.

What is a pro AP?

Professional Advantage Player

So says the Department of Redundancy Department.

The problem with this is that if you got audited they could claim you owe tax on 100% of your winnings (whatever amount the IRS decides that is) with no write off at all for your losses.

They could pretty much say, "You're required to track your losses if you want to deduct them, and since you didn't do that you're not eligible for the deduction."

That's my thought anyway. I'm not a tax attorney and I don't want to find out the hard way.

I'm just stumbled onto something called a sweepstakes model for online poker.

Is this a way we could possibly claim only the wins from online winnings and not the losing sessions?

- Reporting daily wins and losses would make online cash totally unbeatable due to the low margins IMO.

A realistic win / loss for a high volume player might have
1 M in wins
960K in losses
40k profit

Applying 90% cap:
1 M wins
864K ded losses:
136K taxable income (but you only earned 40K netted)

If we are using this sweepstakes model, I feel like it's reasonable to report the wins as cashouts and not deduct losses.

Has anyone asked their accountant about this yet?

Note: Polymarket gambling odds has the 90% cap on gambling losses at only 20% to be repealed as of Sep 14, 2025

Pretty risky to report it like that if the 90% cap rule gets passed. I'm not a licensed CPA, but I think it could be considered as tax evasion.

Holy Cr*p, Batman !

TODAY is September 14 !!!!

Ask an accountant

Actually not a good day to ask one. Trusts, partnerships and S Corp returns due.

You can feel that way but I doubt the IRS will feel that way.

"Agree they are busy right now"

I might have misstated - I'm trying to say that we possibly get a better win to loss ratio, like it is now (possibly), to avoid the 90% cap - on "sessions" being so high that we can't make a profit online.

This new law would make it impossible to make a profit playing online poker if it's recorded by the session most likely on a normal site. However, the sweepstakes model doesn't actually incur losses if I'm reading it correctly. You're only being awarded winnings as prizes.

Sweepstakes is a big enough of a deal to make it possible to make online poker legal using this structure in most states, so I can see some potential to claim the cashouts as prize money from the sweepstakes. Having a different type of a model here that is somewhat tricky to understand at this point from my perspective.

There are 2 sites that I know of:

WPT Gold and Global Poker.

If anyone happens to know, feel free to chime in.

I have a theory for the Sweepstakes taxation for 2026 assuming the 90% cap rule:

A. Deposits are the Expenses - 90% of deposits are deductible
B. Cashouts are the Winnings
C. Formula = Total cashouts less - 90% of Deposits

Example:
20K deposits
120K cashouts
Taxes: 120K - (20*.9) 18K = 102K taxable income

Without the 90% cap rule you would have 120K - 20K = 100K taxable income

It seems like minimizing deposits would benefit you on your taxes with this model as much as possible.

So you are saying depositing very little and cashing out a lot is the way to go???
Why did nobody ever try that before🙂

I see what you're getting at. Since you're playing with "gold coins" on a sweepstakes site you could argue you technically haven't won anything until you exchange them for cash.

That would be a good question for a tax attorney, but I doubt it would fly.

I don't see how that's meaningfully different than arguing that casino chips are not money until you cash them out. I'm not sure if there has been specific guidance issued on that topic, but it seems at least implied in the way that the IRS has construed "sessions" previously that the exchange of chips for cash, or vice versa, is not relevant to when a session begins or ends.

Of course, the idea of coloring up and keeping chips instead of taking cash is not new to cash game players, who typically do this to avoid having to fill out a CTR, which seems to me to be highly counterproductive because they're likely committing a felony (structuring) in an effort to avoid filling out a form that doesn't even go to the IRS.

The casino fills out the CTR not the player. And often, the player may not even know it is being done. CTR's are truly a NBFD.

As to keeping chips to avoid a CTR, I don't see how keeping the same chips could in any shape or form be considered structuring. I don't even think coloring up would do it. But if you color up, casino might just do a CTR anyway.

But no way is this "likely committting a felony". I won't rule out the possiblity but is would be a tiny chance at most. There is no real transaction being done. If it considered a transaction, it is on the casino to initiate the CTR. Definitely not structing as youj are not breaking it into multiple transactions to avoid a CTR.

Far from my favorite source, even amoung AI LLM but hese is what Gemini says...

Yes, a "coupon" worth $25,000 would generally be considered income by the IRS and would be taxable.

The IRS defines "gross income" very broadly. According to the Internal Revenue Code, gross income means "all income from whatever source derived," unless it is specifically excluded by law. This includes, but is not limited to, income received in the form of money, property, goods, or services.

Here's how the IRS definition applies to your situation:

Non-Cash Income: The IRS considers the fair market value of non-cash prizes and awards to be taxable income. A coupon that can be redeemed for $25,000 worth of goods or services has a fair market value of $25,000.

"From Whatever Source Derived": The source of the income, a winning bet, is irrelevant to its taxability. Whether it's from a job, a business, a lottery, a prize, or a bet, if it's income, it's generally taxable.

Cash Equivalents: A coupon for a specific dollar amount is considered a "cash equivalent." Even if it's not physical currency, its value is easily determined and it can be used to acquire goods or services, similar to cash. The IRS treats cash and cash equivalents as taxable income.

In summary, the IRS doesn't care if you get paid in dollars, gold bars, or a very valuable coupon. If you receive something of value, it's considered income and is subject to taxation. You would need to report the $25,000 value on your tax return. The party that paid you the coupon might even issue you a Form 1099-MISC (Miscellaneous Information) or a similar tax form reporting the value of the prize.

Thanks Fore. Yeah that's what I assumed.

One thing that I've learned though is that there are always loopholes in the tax law. For example how would they view satellites that award only a ticket for another tournament, which is not redeemable for cash?

If this law goes into effect I'm sure a lot of people will be looking for loopholes. There might be entire new formats popping up online to get around this bogus tax law.

For example what if they set it up like a poker league format where you buy into a league, then points are only exchanged in the games. After a month or however long the league goes on for players receive cash payouts based on their point position in the league? Again I'm not a lawyer and this is just an example, but something like this could make online poker viable.

You're being pretty pedantic about "filling out" the CTR. I think you know exactly what I mean. Yes, the casino technically fills out the CTR and files it with FinCen, but most often the casino needs to collect information from the player to do so. It is very much a customer-facing event. And I personally have encountered tons of players who avoid cashing out $10k+ precisely to avoid a CTR (which they wrongly call a "tax form") from being filled out. I agree with you they are not a big deal, but my point is that people misunderstand their purpose and act illegally to avoid them.

As for structuring, it is not the act of coloring up that is the structuring. It's when you later cash it out in smaller increments that you're structuring the transaction. It's obviously a super low risk event if you're not actually laundering money, especially if you just use the chips to gamble in future sessions instead of literally just cashing them in in tranches, but it's still illegal and it's just downright stupid to do it for the purpose of avoiding a CTR.

I actually think it was passed in this manner deliberately

Sports betting sites do not want consistently winning bettors

DFS and online poker sites may have a math problem that may not be sustainable in terms of how the ecology is basically just a small pool of true sharks eating all the fish and lesser competent regs. Too much money coming off the table and not enough depositors with the global player pool fracturing into all these smaller and often tiny jurisdictionally ringfenced player bases

Sharks play because there is profit incentive. You kill that, those people go do something else to make money. This leaves everyone else to push money back and forth which is what the sites want...rake it all while nobody is yanking off exorbitant sums ad infinitum

So this law does exactly what it seemingly is intended to do - remove incentive from the best of the best "gamblers" to seek profit and remove $$$ from all the varying sites and their ecologies...

The rake keeps going up. The rakeback keeps getting diluted. Sports betting sites cut your limits like clockwork these days. Hell, they can straight up ban you if they want to

The powers that be are not interested in those of us who found a niche or a great job to fit the lifestyle/life circumstances. They're interested in protecting their rich business owner friends and their golden gooses

****ing UIGEA type **** all over again