Apr 26, 2026
The high-stakes world of professional poker players is getting a shake-up. According to CNBC, some of the game's most successful players say a new tax rule is making their careers increasingly hard to justify. (1)
The shift comes from a provision in President Donald Trump's tax legislation that alters how gambling losses can be deducted. Starting in 2026, gamblers will still report winnings as taxable income, but will only be able to deduct up to 90% of their losses.
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The measure has been framed as part of a broader "sin tax" approach aimed at discouraging risky behavior while raising revenue. The Joint Committee on Taxation estimates suggest it could bring in more than $1 billion over several years, according to the Tax Foundation (2). According to The Budget Lab, "sin taxes" are the ones that are connected with harmful behaviors like smoking and drinking (3).
On paper, it's a technical change, but in practice players say it could erase the already slim margins that keep professional poker viable and potentially force some professionals out of the game altogether.
A small change in tax rules, but a big shift in poker math
Under the old rules, gamblers generally could deduct losses up to the amount of winnings, allowing losses to fully offset taxable gambling income. That meant a player who won $100,000 and lost $110,000 in the same year would owe no income tax, reflecting their actual net result.
Under the new rule, only 90% of losses are deductible. In the same scenario, a player could only deduct $99,000 of losses—leaving $1,000 in taxable income, even though they actually lost money overall.
Critics warn it could turn professional gambling on its head by taxing some players on so-called "phantom income," squeezing a profession built on razor-thin margins and relentless volume.
"You're taxing people on money they didn't make," high-stakes pro Doug Polk told CNBC, explaining that even strong players often operate on extremely narrow margins once all costs are included. (1)
Polk isn't alone in his thinking.
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"This new amendment to the One Big Beautiful Bill Act would end professional gambling in the U.S. and hurt casual gamblers, too," added pro player Phil Galfond, as reported by Associated Press. (4)
Tax professionals working with gamblers say the impact has already caught clients off-guard. Some who previously believed they were profitable are discovering that, under the new rules, their after-tax results could turn negative.
Others warn the rule could push players toward lower-volume schedules, smaller buy-ins or even offshore events, fundamentally changing where and how elite poker is played.
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A shrinking high-stakes field
For veterans like Erik Seidel, the new math is already reshaping the game.
"The margins are really, really thin," Seidel said, warning that even elite players can struggle to stay ahead once taxes are fully factored in.
Seidel has earned tens of millions over his career and was still posting major scores in recent seasons. But he says the new tax rules are changing the economics of staying in the game, and that's why he is scaling back his playing schedule into semi-retirement this year.
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Seidel says he's largely stepped back from $10,000-plus events, which were once a staple of his calendar, since the tax change makes big buy-ins and heavy travel harder to justify.
"I'm going smaller because I don't want the numbers to get too high if I'm only able to deduct 90%," he said.
The concern runs deeper than one player's schedule. High-stakes poker runs on grinders logging huge volume and earning over time through slim edges. If those players pull back, critics say the game's competitive ecosystem could shift with them.
Some tax experts warn many players may not feel the full impact until they file under the new rules and, by then, some careers may already be priced out. Some in the poker world also fear reduced participation could ripple into tournament fields, prize pools and even the broader economics of major live events.
For Seidel, the change has already impacted his playing. In a profession defined by edge, a narrower edge can change everything.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1); Tax Foundation (2); The Budget Lab (3); Associated Press (4)
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Jessica is a freelance writer with a professional background in economic development and small business consulting. She has a Bachelor of Arts in Communications and Sociology and is completing her Publishing Certificate.
