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They argue the rule effectively taxes “phantom income” and could push players toward unregulated markets. In practical terms, a player with $100,000 in gambling winnings and $100,000 in losses would previously report no net taxable gambling income. Under current law, gamblers can deduct 100% of their gambling losses, up to the amount of their winnings. While the reporting threshold increase is a slight relief for players, it arrives alongside another significant gambling-related tax change scheduled to take effect in 2026.
