Trump Weighs Ending Federal Tax on Gambling Winnings

President Donald Trump has indicated he is considering eliminating federal taxes on gambling winnings, comments that have sparked discussion across political and gaming circles. The remarks were made during a brief exchange with reporters aboard Air Force One, although the president offered no concrete plan or timeline for implementing such a change.

Currently, all gambling income, including earnings from casinos, lotteries, sports betting, and horse racing, is taxable under IRS rules. Winnings over $600 typically require reporting, and a 24% federal withholding often applies to larger payouts. Gamblers can deduct losses, but only up to the amount of their winnings. Recent legislation, the One Big Beautiful Bill Act signed in 2025, further limited deductions, allowing only 90% of losses to be deducted against winnings.

Any elimination of federal taxes on gambling income would require congressional approval, as the president cannot make such a change unilaterally. Bipartisan efforts are already underway in the House and Senate to restore full loss deductions. A Senate bill sponsored by Nevada Democrat Catherine Cortez Masto failed to pass by unanimous consent in July and remains under review by the Senate Finance Committee.

The issue is particularly significant in states with large gaming industries, such as Nevada and New Jersey, where changes could affect local jobs and revenue. Analysts say Trump’s comments may have political implications ahead of the 2026 elections.