The ‘Big Beautiful Bill’ was a Christmas tree of wishlist items for the Presidents and for legislators whose votes were needed for passage. But at over 1,000 pages, there are bound to be Easter eggs – special interest provisions as well as time bombs we don’t know about yet.

Just before it was voted on, one provision was discovered that made it into the final bill that will kill off casino loyalty programs like MGM Rewards and Caesars Rewards: recording your gambling transactions is going to mean a bigger tax bill, even when you lose money gambling. People aren’t going to want these loyalty programs to record their gambling!

Las Vegas Airport

The big ticket items in the bill are a grab bag of good policy and very bad policy, and have been broadly covered:

• Personal taxes: Permanent extension of 2017 tax rate cuts and increased standard deduction; SALT cap increased to $40,000 for 5 years (phasing out at modified adjusted gross income of $500,000+); no tax on tips and overtime through 2028; temporary additional $1,000 deduction for seniors; child tax credit permanently raised to $2,200.
• Business taxes: 100% bonus depreciation and R&D expensing made permanent; 20% passthrough deduction made permanent; corporate alternative minimum tax repealed.
• New spending: $175 billion on border and immigration funding (wall, ICE hiring, asylum courts); $150 billion defense add‑on; $50 billion rural health access fund (they needed Susan Collins to vote for it, Lisa Murkowski got exemption for Alaska from changes to Medicaid and Supplemental Nutrition Assistance Program plus tax breaks for whaling captains); debt ceiling increase of $5 trillion through 2029.
• Entitlements: Medicaid work requirements for non‑disabled adults, narrower eligibility for states covering undocumented immigrants; SNAP tightened (annual eligibility check, 3‑month limit for able‑bodied adults without kids).
• Energy & regulatory: Phase‑out of most Biden-era clean‑energy credits, incentives for nuclear & liquid natural gas export terminals.

There’s a major change in the tax code ot how gambling winnings are taxed.

• Currently (through 2025), IRC §165(d) permits taxpayers to deduct 100% of gambling losses against gambling winnings, up to the amount of their winnings. If you won $100k and lost $100k you broke even – you had no net winnings, and owed zero tax.

• However, starting January 1, 2026 §165(d) is amended to only permit deduction of 90% of gambling losses against winnings.

This means that someone who breaks even gambling will owe taxes and someone who loses money will likely owe money for having won. Here are a few examples.

Scenario	Winnings	Losses actually incurred	Allowed loss deduction (90 %)	Actual Net	Taxable gambling income
Break‑even rec bettor	$100k	$100k	$90k	$0k	$10 k
Slight overall loser	$200k	$210k	$189k	(-$10k)	$11 k
Big winner	$300k	$50k	$45k	$250k	$255 k
Low‑volume player	$10k	$20k	$10k (cap = winnings)	(-$10k)	$0 [unchanged]

So how does this affect casino loyalty programs? The entire premise is that gamblings get all of their transactions recorded, and that’s how the program knows what rewards to give you.

But no one will want their gambling recorded because just about everyone will now owe taxes when they gamble. Not recording the transactions doesn’t mean you don’t owe, but it does mean no one may know. (Similarly to when you receive income but no 1099 – most people don’t report the income.)

• Members will avoid using the loyalty programs in order to evade tax.
  
• And give up perks and comps as a result.

Perks and comps, for most, aren’t worth paying income tax for. All of a sudden the comps are no longer complimentary!

And fewer incentives means fewer players, fewer room nights, fewer shows, reduced food and beverage and a decline in jobs at casino destinations.

By the way that’s going to be entirely consistent with what proponents wanted to see happen. It is not an accident or byproduct. The goal here isn’t the revenue raising for CBO scoring of the bill. The goal here is to discourage gambling through the tax code. And that may come down like a hammer on casino loyalty programs.