Poker Writer
Multiple poker players testified against the gambling deduction cap at an IRS hearing. They shared their negative experiences with the new tax, stressing the unfairness of the new policy and the deleterious effect it was having on the gambling industry.
A transcript produced by Todd Witteles of PokerFraudAlert shows the poker players and others in the poker community giving their side of the story. In total, 11 individuals spoke in the teleconference on July 17, including six self-described poker players, other gamblers, and gambling tax professionals.
They all convened to discuss all the negative impact produced by the Big Beautiful Bill’s gambling change.
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Cloutier Says New Tax Will Hurt Gambling Markets’ Bottom Line
The first relevant speaker to the poker discussion was James Cloutier from Pennsylvania. Cloutier is a regular low-stakes tournament player and has also dealt poker in New Hampshire before.
He drew a comparison to what he used to see at his old New Hampshire casino when it introduced a new tax law that was meant to increase revenue, but instead drove players to Connectict. He said this gambling tax will do the exact same thing nationally:
It is going to affect the gaming market, whether it’s casinos, whether it’s sports betting, horse track. It’s once people who are active in these markets see how it affects them firsthand, a lot of players, especially the recreational players, will start to change their habits. Whether it’s changing where they place their bets, how they place them, you will — you will see a change in their entertainment dollars. (coughs) Pardon me. This is why a year ago, when [Dina] Titus wrote her bill, the casino industry backed her right away. They knew this would affect their bottom line.
‘PLO Professor’ Says it is No Longer Viable to Play Tournaments
Poker player, vlogger, coach, and author James Thatcher also gave his testimony. Known as the PLO Professor on YouTube, Thatcher said the decline in poker numbers in the last year is because of the bill. He pointed out a 12% increase in World Series of Poker entries from 2022-2025 and the 5.5% decrease in the last year.
He counted himself among those who voted with their wallets.
I evaluated my last three years of income versus my tournament losses. My net profit in 2025 for tournament buy‐ins was less than $1,000, with about $52,000 worth of buy‐ins. With the new tax law, that meant I would have owed $4,200 versus taxable income. In 2024 it was about the same. And in 2023 I profited about $30,000. So when I was factoring in my past three years’ performances and a review of myself as I do every year, I decided that it was better off this year to play cash games versus the entire year from any previous year.
Thatcher also connected this to the greater incentive to engage in illegal activities, since more of the income is kept off the books.
Tax Expert Asks For More Clarity
One of the non-poker players to speak was Gary Kondler, a name familiar in the poker world for his expertise in taxes related to poker and gambling. He often seen promotes his services to poker players with a booth at various events.
He did not call for a change to the law as the others did, but asked for more clarity for specific tax reasons. In his mind, it will cause many more headaches, not just for the players, but for those doing taxes and the IRS as well.
There are specific tax preparers out there that use different numbers when preparing tax returns regarding gambling income that causes — that will cause a bigger effect in regards to the 10 percent reduction….
So my first concern about this proposal is that it’s going to create a burden not only on taxpayers but on tax preparers and IRS work, because as these totals do not match the system, there will be more automated letters, which take a very long time to answer for all parties involved here.
Kondler also brought up the potential issue with the common practice of selling action between players, asking who would take the 10% reduction between a player and someone who has 20% of their action.
My comment and question to the council would be, under the new proposed regulations, who gets to take the 10 percent reduction? Is it split equally? Does only the person playing actually have to take the reduction? We just would like some more guidance on that.
The Impact on Online Poker Players
Katie Stone, a former professional poker player who still advocates for women in poker, brought the discussion to the impact on online poker players. She pointed out how online poker is all about volume and stacking small wins over the course of many sessions. She gave concrete examples with numbers of how the cap hurts a prolific full-time player.
If I bought in for, 1.9 and I cashed for 2 million, I made $100,000, and that was it. But under this new rule, only 90 percent of that would count, so 90 percent of 1.9 is 1.7. So now instead of making $100,000 on paper, I’m making almost $300,000.
At a roughly 30% tax rate, the latter scenario would wipe out all of the player’s profits.
Stone also pointed out that players often have breakeven or negative years as well. The new rule would be taxing winners on money they did not earn.
As she noted, her husband is still a professional gambler, and hence, this greatly affects their family’s tax returns each year.
Witteles Suggests Separation of Types of Gambling
Witteles himself spoke toward the end of the conference and brought up a new line of thinking with a suggestion. He suggested that each session of gambling be separated, from poker, to sports betting to casino gambling and more.
This allows for a lot more of a straightforward netting of gains and losses within each genre, makes it a lot easier for the gambler to track what they’re really up and down in each genre, which all differ from one another even though they’re all gambling. And it also greatly simplifies the compliance for the high‐volume players. It reduces errors, and it will also be easier on the IRS’s end to make sure that the gambler is complying with the law and is reporting accurately.
Jeremy Ausmus spoke a little about the tax issues that poker players face in the video below:
