When it comes to Ohio gambling winnings, the tax rules have always been strict. As we’ve explained in past articles about gambling tax laws, writing off losses, and reporting winnings, the IRS expects you to report every dollar you win. But under the One Big Beautiful Bill Act (OBBBA), things are about to get tougher for both casual and professional gamblers.
Casual Gamblers
If you gamble for fun—not as a business—you report your total winnings as “other income” on Schedule 1 of your tax return. Up until 2025, you can offset those winnings by deducting losses if you itemize, up to the amount of your winnings. But starting in 2026, OBBBA cuts this back. Casual gamblers will only be able to deduct 90% of their gambling losses. That means even if you break even in real life, the IRS may still tax you on “fictional income.”
Example: Lucy wins $25,000 and loses $25,000 in 2026. Under the new law, she can only deduct $22,500 of her losses. The IRS treats the leftover $2,500 as taxable income—even though she didn’t actually profit.
Professional Gamblers
Professional gamblers are hit even harder. They report gambling winnings as business income on Schedule C and deduct losses and expenses like travel, meals, and lodging. But under OBBBA, starting in 2026, professionals can only deduct 90% of their combined losses and expenses. The other 10% is permanently disallowed, creating taxable income where none really exists.
Example: A pro poker player wins $1 million but loses $900,000 and spends $100,000 on travel. That’s a break-even year in real life. But under OBBBA, only $900,000 is deductible. The IRS taxes $100,000 of “phantom income.”
Why Good Records Matter
Regardless of whether Congress rolls back these changes, gamblers in Ohio and beyond must keep detailed records of their sessions. That includes the date, casino name, type of wager, amounts won or lost, and who was with you. The IRS may compare your records against Form W-2G reports from casinos, so having a solid log is key to defending your return.
Takeaways for Ohio Gamblers
- Starting in 2026, both casual and professional gamblers lose 10% of their deductions on gambling losses.
- Ohio gambling winnings remain fully taxable, no matter what.
- Accurate session records are your best defense if the IRS questions your return.
These changes are frustrating and create taxable income that doesn’t reflect reality. At Ken-Mar Tax, we specialize in helping Ohio taxpayers—especially gamblers—understand their reporting requirements and minimize surprises. If you’ve got questions about how the new rules affect your winnings, schedule a free consultation with us today.
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As an expert in small business tax services and tax consulting Ken-Mar Tax eats, sleeps and breathes small business tax strategies. Being an enrolled agent allows founder, Ken Weinberg, to represent you to the IRS - something only a CPA, tax attorney and Enrolled Agent can do. EAs are the only federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. It also means he is continuously being updated on the new IRS tax codes and taking classes from the IRS that provide guidance on how to file returns so that they are not "flagged."
When you get your taxes prepared by Ken Mar Tax you also have the option to purchase the Tax Audit Protection Plan to avoid the extra costs of paying for audit representation. If you are audited by the IRS, State of Ohio or local taxing authorities, Ken-Mar Tax will meet with the taxing authorities on your behalf to negotiate a settlement for you. The fee covers all costs up to the Appeals level, including up to 15 hours of correspondence with the auditing party – either the IRS, State of Ohio or locality.
