President Donald Trump said he would consider eliminating the federal tax on gambling winnings, raising the possibility of a significant change to how bettors are taxed in the United States. Speaking to reporters, Trump did not outline specific details or a timeline, but framed the idea as part of a broader discussion around tax policy. Under current law, gambling winnings are treated as taxable income at the federal level, a system that affects millions of Americans who gamble each year.
Under current federal law, gambling winnings must be reported as “other income” on tax returns and are taxed based on an individual’s overall income level. Trump has suggested that framework could be revisited, pointing to recent tax changes under his One Big Beautiful Bill Act that eliminated federal taxes on tips, Social Security benefits, and overtime pay, while indicating that gambling winnings could potentially be added to that list.
The issue is further complicated by a separate provision in the same legislation that reduced the allowable deduction for gambling losses from 100% to 90%. That change means some bettors may owe federal taxes even in years when they lose money overall. While eliminating the tax on gambling winnings would primarily benefit those who come out ahead, it would do little to offset the impact on bettors who still end the year in the red.
The potential reach of any change is significant, as the American Gaming Association estimates that a substantial portion of U.S. adults participated in some form of gambling over the past year.
Previous momentum to roll back recent gambling tax changes had stalled after the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act was rejected by the House Rules Committee. The bill sought to restore the full 100% federal deduction for gambling losses, which had been reduced to 90% under the One Big Beautiful Bill Act.
Despite that setback, President Trump’s recent comments about potentially eliminating federal taxes on gambling winnings have renewed optimism among bettors and industry observers. While no formal proposal has been introduced, Trump’s openness to reconsidering how gambling income is taxed suggests the issue remains in play. Coming on the heels of the FAIR BET Act’s rejection, his remarks signal that broader changes to gambling tax policy could still emerge, even as legislative efforts face resistance in Congress.
For now, any change to the federal taxation of gambling winnings remains speculative, as Trump has not proposed specific legislation or outlined how such a policy shift would be implemented. Eliminating the tax on gambling winnings would require congressional approval and could face scrutiny over its impact on federal revenue and tax equity.
Still, Trump’s willingness to publicly raise the issue has shifted the conversation at a time when legislative options appeared to be narrowing. With gambling participation widespread and tax policy already in flux, his comments suggest the administration could revisit the issue as part of a broader tax agenda. Whether that optimism translates into concrete action will likely depend on political momentum in Congress.
