As the New Year approaches, casino operators in Las Vegas are sounding alarms over an impending federal tax law alteration poised to severely impact gamblers. Beginning January 1, 2026, a change in the tax code threatens to diminish the appeal of Las Vegas gambling by altering how losses are deducted. This move, casinos argue, could discourage high-stakes players and negatively affect Nevada’s tourism-driven economy.
Central to the controversy is a provision in a recent tax reform bill that reduces the ability to deduct gambling losses from winnings from 100% to 90%. While the reduction might appear minimal, its implications are significant in high-stakes environments. Gamblers, who often wager hundreds of thousands of dollars, would face taxes on amounts they never actually profited from. Under current law, a player who breaks even after losing and winning $100,000 owes no taxes. However, the new rule would leave $10,000 of those losses untaxable, creating a taxable income on this “phantom” amount.
This change has alarmed the Nevada Resort Association, which sees the deduction as an issue of fairness. For decades, federal tax policy has focused on taxing net gains, not the gross fluctuations typical in gambling. By shifting this paradigm, the tax law arguably penalizes players for the inherent volatility of gambling.
The stakes are high for both the casinos and the state’s economy. Historically, Nevada has relied on its gaming industry as a significant economic engine. According to the American Gaming Association, the U.S. gambling industry contributes over $260 billion to the economy, supporting more than 1.8 million jobs. Within this framework, Nevada plays a pivotal role, being home to some of the most iconic casinos in the world.
Nevada Congresswoman Dina Titus has been a vocal advocate in efforts to revert these tax changes. She introduced the FAIR BET Act earlier in the year and has been fervently urging the House Ways and Means Committee to act swiftly. Despite enjoying bipartisan backing, the bill has stumbled, leaving its fate uncertain.
The potential consequences extend beyond just professional gamblers. Casino owners warn that the uncertainty surrounding tax liabilities has already resulted in a decline in bookings. Derek Stevens, who owns several properties, including Circa Resort & Casino, highlighted that high-limit sports bettors are notably hesitant to place future bets on major events in 2026, fearing tax ramifications if the law remains as is.
Professional poker players are particularly concerned, with some arguing that the new regulations could make it exceedingly difficult to continue their careers legally within the United States. The tax change could force them to seek international tournaments or unregulated platforms, which poses risks to both the players and the industry.
MGM Resorts International, Nevada’s largest employer, has also voiced strong opposition to the tax adjustment, emphasizing potential repercussions for guests, staff, and the broader economic landscape. The casino industry, a cornerstone of Nevada’s economy, supports thousands of jobs and attracts millions of tourists annually, contributing to the state’s financial health.
One possible risk to consider is the potential for increased gambling activity in unregulated markets if U.S.-based options become less favorable due to tax burdens. Offshore and unregulated markets often lack consumer protections, potentially exposing players to unethical practices and undermining efforts to curb problem gambling.
Adding to the complexity is the broader context of federal tax policy reforms. While aiming to simplify the tax code and increase revenue, such reforms can inadvertently impact specific industries like gambling. This particular change, intended to boost tax revenue, could backfire by reducing gambling activity and, paradoxically, decreasing overall tax collections from a sector that has historically been lucrative.
Counterarguments exist, suggesting that the tax deduction change aligns with broader efforts to ensure individuals and industries contribute fairly to federal revenues. Proponents argue that the adjustment closes loopholes that may disproportionately benefit high-income gamblers and seek a more balanced tax structure.
However, the potential domino effect on Nevada’s economy is undeniable. Casinos symbolize not only entertainment but also economic prosperity for the state. The tourism and gaming sectors are intricately linked, with Las Vegas serving as a prime attraction for high rollers and leisure travelers alike. Any policy that risks destabilizing this balance could have far-reaching implications.
In summary, the incoming federal tax law presents significant challenges for Las Vegas casinos, professional gamblers, and the state economy. With the clock ticking toward its implementation, stakeholders remain determined to persuade Congress to reconsider the changes. As the debate continues, it is clear that the outcome will shape the future landscape of gambling in Nevada and potentially across the United States.
