Casino Workers Big Winners, Will Be Allowed To Deduct Tips From Taxes

While President Donald Trump’s “One Big Beautiful Bill Act” (OBBBA) has threatened the livelihoods of professional gamblers, it is turning out to be a likely boon for casino workers.

According to proposed regulations released by the Internal Revenue Service, casino employees will be able to deduct up to $25,000 in annual tip income from their federal taxes, including tips received in casino chips.

The proposed regulations settle a question that has been circulating since Trump signed the OBBBA into law on July 4. The IRS explicitly states that “tangible or intangible tokens that are readily exchangeable for a fixed amount in cash (such as casino chips)” qualify as deductible tips under the new law.

The gaming industry receives comprehensive coverage in the IRS guidance, with four specific casino occupations listed among 68 job categories that “customarily and regularly received tips” before Dec. 31, 2024:

• Gambling dealers: According to IRS data, 70.9% of dealers report receiving tips, which average 70.7% of their total wage compensation
• Gambling change persons and booth cashiers: 78.0% report tips averaging 64.8% of wages
• Gambling cage workers: 37.6% report tips at 57.7% of wages
• Gambling and sportsbook writers and runners: 30.0% report tips at 43.3% of wages

These statistics, drawn from 2023 tax return data, underscore how central tipping is to casino worker compensation, something the IRS incorporated into its methodology for determining eligible occupations.

How the numbers work

Under the new rules, casino workers can deduct qualified tips dollar-for-dollar from their taxable income, subject to an annual cap of $25,000. The deduction phases out for higher earners, beginning at $150,000 in modified adjusted gross income for single filers and $300,000 for married couples filing jointly.

The provision runs through 2028, making it a temporary benefit (at least for now) for tipped workers across the service industry.

The IRS guidance makes clear that not all gratuities qualify. Tips must be truly voluntary, as automatic service charges and mandatory gratuities don’t count, even if they’re later distributed to employees. The customer must determine the amount without coercion.

Workers must also meet several requirements: They need a Social Security number (Individual Taxpayer Identification Numbers don’t qualify), married couples must file jointly, and the tips must be properly reported on tax forms like W-2s or Form 4137.

The regulations are currently in proposed form, with a public hearing scheduled for Oct. 23. Casino workers can begin claiming the deduction when they file 2025 tax returns in early 2026, and the IRS states that taxpayers may rely on the proposed rules while they’re being finalized.

For casino workers accustomed to cash-heavy tip income, the new rules provide clarity that casino chips qualify as deductible tips under federal tax law.