Dana White’s Letter to Trump and the Bipartisan Push to Repeal the 90% Gambling Loss Deduction Cap

The debate over gambling tax rules intensified after UFC President and CEO Dana White sent a letter to President Donald Trump on May 11, 2026. White urged reversal of a provision in the 2025 One Big Beautiful Bill Act (OBBBA) that limits gamblers to deducting only 90% of losses instead of 100%.

This change creates what critics call “phantom income” — taxable profit that exists only on paper. The rule takes effect for 2026 tax filings. As someone who has spent decades observing the evolution of gaming regulation and taxation, I see this as an inflection point that risks undermining the legal betting ecosystem the industry has built since PASPA repeal.

What the OBBBA Actually Changed

For decades, U.S. taxpayers could deduct 100% of gambling losses against winnings. The rule prevented taxation on money never actually kept.

The OBBBA altered this. Gamblers can now deduct only 90% of losses. The remaining 10% becomes phantom income taxed by the IRS even if the gambler broke even or lost overall.

A simple example illustrates the impact. Wins of $10,000 and losses of $10,000 yield deductible losses of $9,000 under the new rule, creating $1,000 of taxable income. The provision is projected to raise about $1.1 billion over 10 years.

Critics argue it was a sloppy addition to a larger bill. The mechanical change may appear modest. Its consequences for everyday bettors, professionals, and the regulated industry are not.

Dana White’s Direct Appeal to Trump

In his May 11, 2026 letter, Dana White laid out a clear case against the 90% cap. He argued it makes legal betting irrational because people can owe taxes in losing years. It hurts fan engagement and the sports betting economy. It pushes bettors toward illegal offshore markets.

White further noted the provision conflicts with other OBBBA elements, including the “no tax on tips” language. He highlighted specific damage to Nevada‘s gaming industry, a cornerstone of state revenue.

White added that he and Trump had already discussed the issue privately. The timing carries weight. The UFC is scheduled to host an event at the White House in June 2026.

This is not abstract policy. Dana White framed the cap as a direct threat to the convergence of sports, entertainment, and legal gambling that has driven industry growth.

Bipartisan Momentum and Industry Coalition

The response has moved beyond one letter. A fast-growing coalition now backs full restoration of the 100% deduction.

The American Gaming Association supports repeal. Nevada lawmakers, including Rep. Dina Titus, have introduced bipartisan bills to fix the provision. Republican critics call the 90% cap a mistake. Prediction markets now show rising odds of repeal.

The rule touches recreational gamblers, professional poker players, high-volume sports bettors, casino patrons, and anyone reporting winnings on tax forms. It is no longer a niche issue. It has become a national conversation with real economic stakes for players, operators, states, and tribes.

This breadth of support creates genuine political pressure. Bipartisan bills in Congress signal that the inconsistency has not gone unnoticed on Capitol Hill.

Risks, Limitations, and the Professional Gambler Impact

Professional gamblers face the sharpest hit. They often operate on thin margins, winning and losing millions annually while generating modest net profit.

Consider the professional example. Winnings of $250,000 matched by losses of $250,000 produce deductible losses of only $225,000. This creates $25,000 of taxable “income” despite breaking even. The result is smaller profit margins, higher overall tax burden, reduced ability to deduct business expenses, and pressure to relocate overseas or underground.

Some experts warn the rule could render professional gambling in the U.S. financially unsustainable. That outcome carries competitive risk. It could drive talent and activity away from regulated markets toward gray or illegal channels.

A counterargument exists. The $1.1 billion revenue projection over 10 years may appeal to budget writers. Yet history shows overly punitive tax measures on legal gambling frequently backfire, expanding black markets rather than collections. The OBBBA’s internal inconsistencies — pairing a gambling loss penalty with pro-worker provisions like no tax on tips — further weaken the policy’s coherence.

The Bottom Line

The 90% gambling loss deduction cap represents a structural shift that threatens to punish the very legal ecosystem policymakers claim to support. Dana White‘s letter, the American Gaming Association‘s stance, Rep. Dina Titus‘s bipartisan legislation, and shifting prediction market odds all point toward meaningful repeal momentum.

Operators and client-partners should treat this as an active planning input. Revenue protection strategies must account for potential behavioral changes among high-volume and professional bettors. The coming months will test whether Congress recognizes the inconsistency and acts before 2026 tax season entrenches the damage. Repeal would restore rationality, protect regulated markets, and reaffirm the foundation of legal gambling in a maturing industry.