This Week in Gambling: Tax Deduction Repeal Finally Begins to Move
Welcome to the gambling news weekly round-up here on PokerStrategy, where we'll highlight the big stories of the week. This week, momentum finally began on a repeal of an extremely unpopular tax regime change that capped U.S. gamblers at deducting 90% of their losses.
Will U.S. Gamblers See Tax Regime Changed in Time for 2027 Filings?
The Trump Administration's passage of the One Big Beautiful Bill Act in 2025 included the aforementioned rule, though it got little airtime outside of gambling circles. Poker players and other gamblers tried a last-second push against it after industry leaders like Phil Galfond raised the alarm, but the bill ultimately passed intact.
Under the new regime, a gambler could break even, spending $100,000 and winning $100,000, but that person would still be on the hook tax-wise for $10,000 in gambling "winnings." At higher spending levels, the effects could be seismic.
That tax change didn't sit well with politicians in gaming-friendly states, since it encouraged gamblers to lower their spending or turn to unregulated outlets. Less money in casinos meant less tax revenue and less support for gaming industry jobs that are the lifeblood of an economy like that of Las Vegas.
U.S. Rep. Dina Titus of Nevada has led the charge in working for a repeal. She's been joined by fellow Democrat Steven Horsford, also of Nevada. Their bills have gained bipartisan support, but every time they have come up in committee, they've gained little traction.
That changed this week, when the House Ways and Means Committee advanced a tax package that included language from the FULL HOUSE Act, which aimed to restore the 100% deduction cap. The tax package advanced with strong bipartisan support, by a 38-5 margin.
That bodes well for its chances going forward, but poker players will be anxiously awaiting a result before the end of the year. If no fix gets pushed through by then, gamblers will have to abide by the tax law when sending their 2027 filings in. If, on the other hand, a repeal succeeds by year's end, the change will never actually manifest on anyone's returns. The 2026 tax year was the first one to which it applied.
A Kalshi market speculating on the possibility of a repeal this year spiked from 15% to 30% in the wake of the news. It has since settled back at 22%.
Additional Gambling News
Florida Illegal Gambling Busts Implicate Poker Player
Illegal gambling has been an ongoing issue in Florida. Law enforcement task forces have repeatedly announced busts of illegal slot arcades. The problem has gotten bad enough that the state attorney general pushed for increased penalties earlier this year.
A couple of fresh rounds of headlines hit the wire this week, and one of them implicates a poker player.
Authorities allege that Devon Shalmi, who has six figures in tournament cashes, helped operate an illegal sports betting ring. They booked the 42-year-old on charges including money laundering, operating a gambling house, and bookmaking. Shalmi allegedly handled more than $3 million in bets. He sometimes collected from debtors at public poker games, according to a local news report.
Shalmi has a prior guilty plea for money laundering after a similar sting. He escaped that one with probation.
In addition to that bust, an undercover operation in St. Petersburg saw law enforcement seize more than $250,000 in illicit profits and 163 illegal slots. They uncovered the gambling operations at a bar called "The Zoo Sports Club and Grille," and the aptly named "Action Arcade."
Image credit: Gage Skidmore/Wikimedia Commons (license)
