The 90% gambling loss rule, with a calculator
Starting with 2026 returns, only 90 percent of gambling losses are deductible. A break-even year now carries a tax bill. Enter your year below to see yours, then see the one record that makes it smaller.
Published 2026-11-04 · Updated 2026-11-04
Not tax advice. This page explains the rules in plain language so you know what records to keep. Tax law changes and your situation is specific to you. Talk to a CPA or enrolled agent before you file.
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What changed
The One Big Beautiful Bill Act (Public Law 119-21, section 70114, signed July 4, 2025) rewrote the wagering loss rule in section 165(d) of the tax code for tax years beginning after December 31, 2025. Until 2025 you could deduct gambling losses up to the amount of your winnings. From 2026 you deduct the smaller of two numbers: your winnings, or 90 percent of your losses.
Everything else stays the same. Winnings are still income, reported in full. Losses are still an itemized deduction on Schedule A, so they do nothing for anyone who takes the standard deduction. For professional gamblers filing Schedule C, business expenses count as wagering losses, so the 90 percent limit reaches them too. Bills to restore the full deduction, including the FAIR BET Act (H.R. 4304), have been introduced; none has passed, so the rule applies to 2026 returns.
Who pays more
| Your year | Won | Lost | Taxable, old rule | Taxable, 2026 |
|---|---|---|---|---|
| Net loser, by a lot | $20,000 | $30,000 | $0 | $0 |
| Net loser, by a little | $50,000 | $52,000 | $0 | $3,200 |
| Break-even regular | $60,000 | $60,000 | $0 | $6,000 |
| Winning player | $120,000 | $80,000 | $40,000 | $48,000 |
The line sits at about 111 percent. If your losses are more than winnings divided by 0.9, the deduction still covers all your winnings and nothing changes. Below that line, from a small net loss all the way up through a winning year, you now pay tax on more than you kept.
The 10 percent formula
When your losses are below that 111 percent line, the 2026 rule comes down to one sentence: you pay tax on your net result plus 10 percent of the losses you report.
Break even on $60,000 of winning sessions and $60,000 of losing sessions and your net is zero, but 10 percent of $60,000 is $6,000 of taxable income. Double your volume at the same result and the phantom income doubles. The bill is driven by how big your reported totals are, not by whether you won.
Why session records shrink the bill
That makes one question matter more than it ever did: how big are your reported totals? The answer depends on how your play is counted.
The IRS measures a casual gambler's result by session, not by bet. A Chief Counsel memo (AM 2008-011) treats a session of slot play as one result, gain or loss, and Notice 2015-21 proposed a session-based safe harbor for slots. For table games the practical unit is the same: one continuous stretch of play at one casino, cash in against cash out. Count every hand or every jackpot separately and both totals balloon. Count sessions and they shrink, while your net result stays exactly the same.
| Same year, counted two ways | Wins reported | Losses reported | Net | Taxable, 2026 |
|---|---|---|---|---|
| Each W-2G jackpot as a win, everything else as losses | $36,000 | $37,000 | -$1,000 | $2,700 |
| By session: 40 sessions, 15 up and 25 down | $6,000 | $7,000 | -$1,000 | $0 |
The second line only exists if you have the sessions written down. A W-2G gives the IRS the gross jackpot; your session log is what shows that the jackpot came back in the same session. Without the log there is no argument to make. With it, your preparer can choose the method that fits your play. Under the 90 percent rule that choice is worth real money.
The records to keep
IRS Publication 529 asks for an accurate diary or similar record, kept as you go, showing for each session the date and type of game, the casino and its location, the people with you, and the amount won or lost. Back it with your W-2Gs, the casino's win/loss statement, and ATM and marker records. The full list, ranked by how much weight each carries, is in how to prove gambling losses.
Keeping them without the work
Blackjack Logger is a free app for iPhone and Android. It records a session in about ten seconds as you leave the table: result, casino, date, time and hours, with a note for anyone you played with. At year end it exports a CSV with one row per session, which is the diary Publication 529 describes, ready for your preparer to total. Nothing is uploaded; the record stays on your phone. How the gambling log works.
Under the 90 percent rule, every session you log is worth money.
Free on iPhone and Android. No ads, no subscription.
Sources
- Public Law 119-21, One Big Beautiful Bill Act, section 70114
- IRS, Topic No. 419, Gambling income and losses
- IRS, Publication 529, Miscellaneous Deductions
- IRS Chief Counsel, AM 2008-011, wagering gains and losses by session
- IRS, Notice 2015-21, proposed slot machine session safe harbor
- Congress.gov, H.R. 4304, FAIR BET Act
FAQ
What is the 90 percent gambling loss rule?
For tax years beginning after December 31, 2025, you can deduct the smaller of your gambling winnings or 90 percent of your gambling losses. Before 2026 you could deduct losses up to the full amount of your winnings.
Do I owe tax if I broke even gambling in 2026?
Usually yes, if you itemize. A break-even year leaves 10 percent of your losses as taxable income. $60,000 won and $60,000 lost means $6,000 of taxable gambling income.
Does the 90 percent rule affect me if I take the standard deduction?
No. Gambling losses are only deductible if you itemize, so standard-deduction filers pay tax on all their winnings under both the old and new rules.
How can I reduce the tax under the 90 percent rule?
Keep a session-by-session record. Your 2026 taxable gambling income is your net result plus 10 percent of the losses you report, and counting by session keeps reported totals small. Ask your preparer which method fits your play.
Has the 90 percent rule been repealed?
Not as of this writing. Bills such as the FAIR BET Act (H.R. 4304) would restore the full deduction, but none has passed, so the rule applies to 2026 returns.
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