President Donald Trump has indicated he may examine whether gambling winnings should continue to be taxed at the federal level, adding a new point of discussion to broader conversations surrounding U.S. tax policy. His remarks surfaced as lawmakers, industry figures, and regulators evaluate existing IRS rules, upcoming changes to loss deductions, and the fiscal implications tied to gaming activity across the country.

Trump’s Comments Renew Attention on Federal Gambling Tax Rules

While speaking with reporters aboard Air Force One, Trump was asked whether he would support removing the federal tax applied to gambling winnings. He referenced income categories already exempt under recently enacted law and left open the possibility of expanding those exclusions. “We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime,” he said. “No tax on gambling winnings, I don’t know. I’m gonna have to think about that.”

In another exchange, he added, “No tax on gambling winnings? I don’t know about that,” and concluded with, “I’m going to have to think about that.” The conversation ended when he advised those onboard to prepare for turbulent air.

The comments follow the passage of the One Big Beautiful Bill Act (OBBBA), which introduced significant changes to federal taxation by exempting tips and overtime pay and expanding deductions for certain Social Security and retirement-related income. Several of these adjustments took effect in early 2025. Projections from policy analysts estimate the act could add US$3.4 trillion to the federal deficit over the next ten years.

Any changes to federal taxation on gambling winnings would affect millions of Americans. Industry data indicate that nearly 60% of adults participated in some form of gambling within the past year. About 30% visited physical casinos, while 21% placed sports bets. Commercial gambling revenue reached US$110.3 billion in 2024, supported in part by strong growth in sports betting and online gaming products.

According to Fox Business, under current IRS guidelines, all gambling income must be reported on Form 1040. A W-2G is issued when winnings exceed US$600 in certain situations, and when payouts reach US$5,000 or more, operators typically withhold 24% for federal income tax. The withholding rate may rise to 28% or 31% if a winner does not provide a Social Security number. The IRS states that gambling income “includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos,” and that prizes such as trips or vehicles are also taxable. Loss deductions are permitted only up to the amount of claimed gambling income.

New rules adopted earlier in the year will further restrict deductions beginning in 2026 by limiting losses to 90% of gambling income, compared with the previous full-offset approach. These changes have triggered concern among professional players, including high-stakes bettors and poker players who regularly experience volatility in annual results. Some, such as Poker Hall of Famer Erik Seidel, have publicly indicated the revised rules may significantly impact their ability to maintain full-time play.

Policymakers Weigh Possible Consequences

Economists, tax scholars, and industry advocates have already started evaluating what eliminating the federal tax on gambling winnings might mean for government finances. While the IRS does not separately publish the total revenue gained from gambling-income taxation, analysts suggest the amounts involved are substantial. With commercial gambling revenue exceeding US$100 billion annually, even modest effective tax rates translate into several billion dollars in federal revenue.

Some critics argue that easing tax requirements on winnings could intensify public-health concerns around gambling, particularly among younger male bettors who make up a growing share of online wagering activity. Others note that a federal exemption could make regulated play more appealing when compared with offshore platforms, though such a change would not affect operators’ corporate taxes.

Meanwhile, efforts in Congress continue regarding another gambling-related issue: the rule limiting deductible losses to 90%. Representative Dina Titus has proposed legislation to reverse the change and has attempted to attach it to other bills, but the measure has not advanced. Members of the gaming community and trade organizations have also been meeting with lawmakers to draw attention to the issue before the legislative year concludes.

For now, Trump’s remarks do not signal a formal policy proposal, and no draft legislation has been released. Any concrete plan would require congressional approval, and fiscal analysts would need to assess the revenue impact before debate could begin.