Deputy Editor
An IRS tax hearing on Friday morning will have a distinctly poker-flavored schedule of speakers. Several poker players are scheduled to present, along with Gary Kondler, who runs a popular tax service that caters to high-volume gamblers. The hearing concerns the 90% loss deduction cap on gambling winnings.
As a reminder, the deduction cap means that gamblers could be on the hook for taxes on money they never won. A breakeven player, for example, would pay taxes on 10% of their gross receipts, despite earning $0.
Among the poker players on the itinerary:
- Sara O’Connor
- James Cloutier
- Katie Stone
- Todd Witteles
Additionally, the heaviest hitter in the lineup will be Nevada U.S. Rep. Dina Titus. Rep. Titus has been the most ardent advocate against the deduction cap. Such a policy drives individuals away from gambling, potentially costing her state huge sums of tax money if it turns away tourists. Titus has worked to get a repeal through, but she says Republican leadership has repeatedly blocked her efforts.
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Titus, Kondler, Poker Players to Argue Against New Tax Policy
While the hearing is scheduled for Friday at 10 a.m. ET, those who submitted requests to testify have their speaking outlines posted on the government’s regulations page.
Kondler will talk about the need to “ensure that the final regulations are practical, administrable, and consistent with the governing statutory framework.” He has requested 10 minutes to present.
Both Witteles and Kondler plan to discuss the definition of “sessions.” In gambling tax law, players can net out their “sessions” in certain filing strategies, but the definition of a “session” isn’t completely spelled out.
Witteles’ presentation suggests that a session be defined as the entire year.
“For example, all poker play would be considered one session, all sports betting would be considered one session, etc,” his notes say.
Gambling Tax Hearing Won’t Directly Result in a Repeal
Witteles will suggest delaying the implementation of the new tax laws until the clear issues with phantom income are addressed.
As it stands, time is running short if the onerous policy is to be repealed by the time poker players and other gamblers have to file taxes for 2027. Last year, industry stakeholders said the goal was to get a repeal through before the end of 2026. If they succeeded, then players would never actually feel the burden of the tax policy, since it first applies to 2026 winnings.
While the tax hearing represents an encouraging opportunity for stakeholders to make their voices heard, it’s important to acknowledge that it won’t directly result in a policy change.
“This IRS panel doesn’t have the power to change the rule,” the Fairplaygov account noted on social media. “But hopefully there will be some takeaways from testimony and panel comments to bring to Congress.”
Poker tournaments may have begun feeling the pinch of the tax change. Numbers have declined in higher-stakes events across the country this year. The World Series of Poker main event proved no exception.
It’s hard to say exactly how much the tax change affects numbers, since other factors remain at play. But nobody in the industry is excited to pay taxes on money they never won. And the hearing is one of the first real regulatory steps in restoring sense to gambling tax policy.
