A controversial tax provision embedded within the 2025 One Big Beautiful Bill Act has drawn the ire of the legal gambling industry, prompting UFC President Dana White to intervene.
In a formal letter sent to President Donald Trump, White urged the administration to reverse a federal limit on gambling loss deductions that has caused widespread alarm among professional bettors, casino operators, and sportsbooks since becoming law last year.
The “Phantom Income” Tax Trap
The technical crux of the issue involves the deduction of losses against winnings. Previously, U.S. gamblers could deduct 100 percent of their losses, meaning a bettor who won $500,000 but lost an equal amount owed no taxes. Under the revised code, only 90 percent of losses are deductible.
This shift exposes bettors to taxes on “phantom income” they never actually kept. High-volume sports bettors and poker players warn that this structure effectively punishes the “churn” of legal wagering rather than taxing actual profits.
UFC president Dana White’s appeal frames the provision as “economically irrational” for those operating within regulated markets. He also pointed to secondary damage in Nevada’s tourism sector, arguing that heavier tax exposure leads to smaller tips for hospitality workers, a direct hit to the administration’s “No Tax on Tips” messaging.
Safeguarding Regulated Markets
The broader industry fear is that this cap will drive sophisticated bettors back into the hands of illegal offshore operators who do not issue IRS forms. White emphasized that regulated betting is now essential infrastructure for professional sports:
“[Regulated sports betting has become] deeply integrated into modern professional sports, helping leagues and promotions drive audience engagement, sponsorship revenue, and media value.”
As a longtime ally of Trump, White’s involvement elevates the dispute from a niche industry complaint to a high-profile political issue. The underlying message to Washington is straightforward: if the government expects citizens to remain within transparent, taxable, and regulated legal markets, the tax code must not penalize them for doing so.
