Starting with tax year 2026, only 90 percent of gambling losses are deductible, and still only up to the amount of winnings. Breaking even now produces taxable income.
The change hits casino players, sports bettors, and anyone whose prediction market trades are treated as wagering. It is the strongest reason to establish a non-gambling characterization for prediction market activity where the facts support it.
No. Gambling losses are an itemized deduction, which is a second limitation on top of the 90 percent cap.
Source: IRC 165(d) as amended by Public Law 119-21, section 70114; repeal proposed in H.R. 4304
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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