As Gambling Apps Grow, Bettors are Slated to Owe More in Taxes This Year
A new federal tax code change in 2026 will limit gambling loss deductions to 90% of winnings, potentially increasing taxes for bettors.Summary
The increasing popularity of gambling apps like FanDuel and DraftKings, alongside prediction markets like Polymarket and Kalshi, is coinciding with a change in federal tax law. As of January 1, 2026, gamblers will only be able to deduct 90% of their losses, down from 100% previously. This means even breaking even on bets could result in owing taxes, as only 90% of losses can offset winnings. A bill called the Fair Bet Act has been proposed to restore the 100% deduction, but its passage is uncertain. The situation is further complicated by prediction markets, where users buy and sell financial contracts rather than placing traditional bets, creating ambiguity about how these bets are taxed. Some prediction market operators suggest their platforms may become more tax-advantageous due to the new rules, but overall, the change is expected to increase tax burdens for gamblers.
(Source：Gizmodo)