On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, including Section 70114, which limits gambling loss deductions to 90% of actual losses starting January 1, 2026. This provision, designed to raise $1.1 billion in federal revenue over eight years, fundamentally misunderstands the sports betting market structure and threatens to trigger an industry-wide crisis.
 

This analysis examines how a seemingly technical tax adjustment could precipitate the largest disruption in American gambling since the federal ban on sports betting itself, quantifying the financial impact across multiple scenarios and identifying the narrow legislative window remaining to prevent industry upheaval.