The corporate media is in full panic over a single provision in President Trump’s new tax reform bill: a small change with the potential to weaken not just America’s gambling addiction, but the seedy networks that profit from it.
The provision reduces the amount of gambling losses a person can deduct from their winnings. Instead of writing off 100 percent of their losses, gamblers would only be allowed to deduct 90 percent. That means gamblers who break even, or even lose money, could still owe taxes.
Under current federal tax law, gamblers both professional and casual can deduct their gambling losses up to the amount of their winnings.
That means if you win $100,000 in a year but also lose $100,000, you owe no tax because your net income is zero.
This rule lets high volume gamblers avoid paying taxes so long as they can match their winnings with documented losses, even if they ultimately make little or no profit.
The new proposal in Trump’s tax bill changes that by capping the deductible portion of gambling losses at 90 percent.
So if you win $100,000 and lose $100,000, you can only deduct $90,000—leaving $10,000 taxed as if it were income, even though you didn’t really profit.
The change would raise about $1.1 billion for the government and could make high-stakes gambling less attractive, especially for those who rely on current tax rules to offset risk.
Professional gamblers are fuming. Casino lobbyists are scrambling. And left-wing lawmakers are rushing to protect their donor base.
Newsweek claims this bill will “kill professional gaming.”
Democrats are already trying to say that Kentucky horse racing will be killed as a result of high stakes gamblers betting elsewhere.
Democrats are not talking about the estimated 2 million people who meet the clinical definition of gambling addiction, and the 5 million others who have ‘mild to moderate’ gambling addictions.
Gambling addiction, or gambling disorder, is a behavioral addiction where a person is unable to stop gambling despite serious harm to their finances, relationships, or mental health.
It involves a loss of control, constant preoccupation with betting, chasing losses, lying to cover up the behavior, and often escalating the frequency or size of bets to recapture the same thrill.
Like drug or alcohol addiction, it hijacks the brain’s reward system, creating psychological dependence that overrides logic and self-control. The result can be financial ruin, broken families, job loss, depression, and even criminal behavior, making it a serious public health issue.
Democrats say it is unfair. They say the Trump bill might reduce gambling. They say it could push bettors to offshore websites. But that result may help Americans get out of the grip of the gambling industry.
For decades the gambling industry has operated with a hidden government subsidy: a tax structure that shields reckless high-volume betting from real consequences.
That setup has helped fuel the rise of both legal casinos and the underground gambling economy long tied to organized crime.
From the earliest days of Las Vegas to the backrooms of New York and Chicago, gambling has been a favorite tool of organized crime.
The FBI has documented links between illegal sports betting rings and criminal syndicates in New Jersey, New York, and Nevada for decades.
- In 2011, federal prosecutors indicted members of the Genovese and Bonanno crime families for running illegal gambling operations alongside loansharking and extortion.
- In 2021, an undercover probe in Los Angeles revealed Asian triad and Mexican cartel connections to unlicensed casinos and online betting apps.
- Even legal gambling has been used for money laundering and skimming operations, most infamously exposed in the 1970s Kansas City Mafia skimming investigations that inspired the movie Casino.
Organized crime thrives where money moves fast and oversight is weak. Gambling, especially digital and offshore, provides the perfect cover.
By forcing a tax reckoning on gamblers, Trump’s bill doesn’t just raise revenue.
It shines a spotlight on an industry that has been too comfortable for too long operating in the gray zones of law and morality.
Rep. Dina Titus of Nevada says the bill would hurt her state’s casino economy. Left-leaning media are suddenly clutching their pearls on behalf of poker professionals. But ordinary Americans aren’t buying it. They’ve seen the damage this industry does.
State lotteries prey on the poor. Sports betting apps target young men with addictive personalities. Casino profits often get funneled to politically connected interests, and when the house wins, families lose.
Many of these industries also come with significant levels of official corruption.
Alabama’s gambling industry has been plagued by corruption scandals, particularly surrounding efforts to legalize electronic bingo.
In 2010, a major federal investigation led to the indictment of casino owner Milton McGregor, several state senators, and lobbyists on charges of bribery and conspiracy, accusing them of trying to buy votes to pass pro-gambling legislation.
Although most were later acquitted, the case exposed deep ties between gambling interests and political influence in the state.
Additional controversies included allegations of perjury by law enforcement officials involved in raids on casinos like VictoryLand, raising concerns about politically motivated prosecutions and backroom deals tied to the control of Alabama’s gambling market.
In Texas, the long-term corrupt RINO former Speaker of the House who still has significant influence over the state’s politics, Joe Straus, told lobbyists that his only goal was to legalize gambling in the Lone Star State in order to enrich his family which had a horse racing track at Retama Park and a royalty interest in gambling across the state worth billions when legalized.
Democrats in Texas have previously admitted on undercover camera that the state’s gambling interests and lobbyists are connected to the Bonnano crime family.
States raise an estimated $1.8 billion annually in gambling taxes.
But that revenue is dwarfed by the enormous social cost of gambling addicts.
According to the National Council on Problem Gambling, annual social costs of problem gambling in the U.S. are roughly $7 billion, covering healthcare, criminal justice, job loss, and family support.
A report in the Guardian claims the real social costs are double that number, at $14 billion per year.
Trump’s proposal won’t eliminate gambling. But it could finally remove the tax deduction shield that protects it from financial consequence.
By changing the calculus of gamblers, it could end up helping some break out of the cycle that keeps them coming back.
Critics claim this change would tax “break-even” bettors.
That’s not a bug, that’s the point. It is time gambling faced real market pressure instead of being propped up by clever tax rules and political privilege.
The tax subsidy provided to the gambling industry helps enable addiction.
Trump’s “big beautiful bill” is already being attacked by the same crowd that protected the student loan racket, the pharmaceutical middlemen, and the social media censors.
Now they’re defending gamblers, casinos, and offshore betting markets.
Trump’s policies are aimed at helping taxpayers and working men and women, while Democrats are busy defending the gambling interests of their big donor casino billionaires. But this time, the working class wins.
This might be surprising policies coming from Trump, who was active in the casino business in the 1980s, with high-profile casinos in Atlantic City.
His most famous casino, the “Trump Taj Mahal” opened in 1990. By 2009, Trump had largely exited the industry, however.
Whether you’re a single dad who lost a paycheck to a sportsbook app or a retiree burned by a casino weekend, this change is long overdue.
The days of gambling with taxpayer subsidies, enticing and enabling gamblers to risk more because they knew they could write off all of their losses, may finally be numbered.
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