“I Just Got a W-2G From a Casino. What Do I Do Now?”
If you gamble in Las Vegas, a new federal tax law just made gambling taxes worse. The One Big Beautiful Bill (OBBB) changes how gambling losses are deducted and it will affect many Las Vegas gamblers starting in 2026. For years, gamblers could deduct 100 percent of documented gambling losses up to the amount of their winnings. Under the new law, that deduction is limited to 90 percent of losses. The result is that many gamblers may owe tax even if they broke even. For example, if you win $50,000 during the year but also lose $50,000, only $45,000 of those losses may be deducted. The remaining $5,000 can still be treated as taxable income by the IRS. For regular Las Vegas gamblers, sports bettors, and poker players, this creates a real risk of paying taxes on income that never actually existed.
The new law also changes casino reporting rules that many Las Vegas gamblers are familiar with. The slot machine jackpot threshold that triggers a Form W-2G is increasing from $1,200 to $2,000. This means fewer slot hand pays and fewer tax forms issued by casinos for smaller jackpots. However, gamblers should not confuse fewer forms with lower tax liability. The IRS still requires all gambling winnings to be reported on your tax return whether a Form W-2G was issued or not. Anyone gambling in Las Vegas casinos, betting through sportsbooks, or using mobile betting apps should assume the IRS expects full reporting of gambling income.
The bottom line is that gambling taxes just became more aggressive for Las Vegas gamblers. The new deduction limits mean gamblers can face taxable income even when they did not actually profit for the year. This makes accurate gambling logs and recordkeeping more important than ever. If you received multiple W-2Gs, have large gambling winnings or losses, or are dealing with IRS notices related to gambling activity, you should get help before the problem grows. Contact Keeton Tax Law PLLC at (702) 530-9709 to discuss your gambling tax situation.
