AGA Turns Off Comments, Turns On Professional Gamblers

One particular tweet late Thursday afternoon from the American Gaming Association (AGA) was not well received by people who like to place bets.

I would show you all the replies to the tweet, except I can’t. The AGA turned them off. 

The tweet in question? It’s embedded below, but I feel like it needs to be typed out as well. 

“We commend congressional leaders on the passage of the One Big Beautiful Bill Act. Our industry’s ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of OBBBA that support consumers, encourage business innovation and investment, and strengthen U.S. competitiveness. We look forward to President Trump’s expected signing and will work closely with Congress in the coming months to address the changes to wagering deduction losses and further modernize the tax code.”

To be clear: The OBBBA — as written, as passed, and as signed by President Trump — puts the livelihoods of professional gamblers (and anyone who itemizes their gambling wins and losses) on life support. The bill only allows gamblers to deduct 90% of their losses.

Historically, a big-swinging pro might win $10 million and might lose $9.5 million. That’s a tidy $500,000 profit because the full loss amount could be deducted.

Not anymore. Now, this winning bettor would only be able to deduct $8.55 million of the losses, for a “profit” of $1.45 million. Figure the tax on that is 37%, which means our $500,000 winner will be paying $536,500 in federal taxes on a half-million of winnings.

That is the most bonkers, unfair, un-American, ridiculous, nonsensical, unreasonable thing I’ve ever seen come out of a piece of legislation.

And this is what the AGA says it’s “commending”?

Literally putting people out of business, taking away their livelihoods?

Listen up

First off, let me say this for people who need to hear it, and I’m going to do it slowly and with emphasis.

The. AGA. Exists. For. The. Operators.

The group’s core dues-paying members include MGM Resorts International, VICI Properties Inc., Churchill Downs, The Cordish Companies, and Circa Resorts LLC, among many others. See the theme?

So I reiterate. 

The AGA operates to serve their interests — not the players necessarily, or the industry at large. It bears repeating because some in and around the industry have misunderstood the AGA’s role as a kind of guard dog for all constituencies within the wide world o’ gambling. 

That’s why they are on board with the megabill. Or at least can tolerate it. 

I talked to an industry source who is operator-friendly and comes down on the side of the AGA here. He explains why they are down with what happened.

“This is where political calculation comes in,” my source explained. “You take the wins, you take the losses.”

In this case, the wins, according to him, were big enough to swallow the 90% deduction cap and any potential ripple effects that may follow, such as how to handle VIPs, including those who actually win money.

The bill also contains research and development credits. Extended depreciation timelines. And, significantly, the permanent expansion of the standard deduction, which may very well lead to more casino and sportsbook traffic.

The OBBBA was passed through reconciliation, meaning it needed only a simple majority. But that also triggered the Byrd Rule: No provisions could be revenue-neutral. Everything had to either raise money or lose it.

And when lawmakers went looking for places to squeeze out revenue, the gambling loss deduction — where professional players live and breathe — was an easy target.

“Taking all of what was in the 2017 Tax Cuts and Jobs Act required it to be rinsed in what’s called the Byrd bath, named after Sen. [Robert] Byrd,” my source said. “So they needed to have some type of revenue effect on everything, and it included 100% deduction losses. They could have taken it down to 50%, 60%, or it could have been a 5% haircut. They landed on a 10% haircut.”

Quite the climate

The source was careful to emphasize that this was part of a bigger picture, particularly in the current political climate.

“Look, in any large piece of legislation such as this one, there’s stuff you try to get and stuff you don’t always get,” he said. “The industry has a lot of things they need to work on with this administration over the next 3.5 years, and it was important to achieve some of the things that they were able to get — particularly the expanded tax credits and some of the things around business investment that a number of operators, vendors, and suppliers throughout the industry are absolutely going to take advantage of.”

It’s not just gamblers, he said, who took a hit.

“Is the AGA going to fight tooth and nail and try to hold up a massive piece of legislation?” he asked, rhetorically. “Everyone in every industry — whether you’re energy, whether you’re renewables, whether you’re manufacturing, whether you’re retail, whether you’re service industry — you also took wins and losses.”

In other words: sad trombone for everyone. But for pro gamblers? Break out the coffins, call up the ditch diggers, prepare the obituaries.

“We’re talking about a very small class of gamblers here,” the source said. “People who already live and breathe the edge. You think they won’t find new ones?”

Fair point. 

But also: not the point.

The AGA, on balance, accepts the results of this bill on behalf of the operators it works for. (At least until/unless their whale traffic heads for calmer, offshore waters.) Those operators’ “regular” customers — the folks who walk into casinos and play slots and dine, or place SGPs, and generally are in it for fun — aren’t going to notice a thing. In fact, they may come out ahead thanks to the standard deduction bump.

But professional gamblers? The people who make their living betting edges? They’re basically being told, “Sorry, collateral damage. Good luck with the IRS.”

No wonder the AGA turned off the replies on the tweet.

If you’re a grinder, if you itemize, if this is your job, you just became politically expendable. A rounding error.

The source told me the industry will back Nevada Rep. Dina Titus’ mitigation efforts. Maybe she gets her bill to restore the original formula passed. Maybe a fix comes in the next round of tax talks. Maybe it doesn’t. But if you’re a pro, you’re not exactly sleeping easy right now.

So, no, the AGA tweet wasn’t wrong from its point of view. The tweet just made it crystal clear whom its point of view serves.