Professional poker player says new tax law forces him into semi-retirement

Professional poker player Eric Seidel says he chose semi-retirement this year, but not because his career has slowed down.

Seidel played in his first major tournament in 1988, finishing runner-up in the main event of the World Series of Poker. He became a full-time professional poker player in 1995 and has amassed more than $48 million in winnings playing in live poker tournaments throughout his career, according to the Hendon Mob Poker Database, an online poker statistics collection.

In recent years, the 66-year-old estimates he has competed in about 130 to 150 events a year, including the number of times he has re-entered after being eliminated. According to Hendon Mob, the total prize pool for last year’s tournament exceeded $2.8 million.

But this year, he says he plans to participate in perhaps a quarter of the tournaments he normally participates in, and virtually no “high roller” events that cost more than $25,000 to enter. The reason, he says, is simple: taxes.

President Donald Trump’s One Big Beautiful Bill Act, passed last July, includes provisions that change the way gamblers deduct their losses. Taxpayers will still have to treat gambling winnings as income, but they will no longer be able to use all of their losses to fully offset their winnings. Rather, starting in tax year 2026, you will only be able to deduct up to 90% of your losses.

That’s why some professional players are wary of spending too much money playing for fear that a 10% difference in tax rules will completely erode their profits, says Russ Fox, registered agent and principal at Clayton Financial & Tax, a firm that specializes in gambling taxes.

Fox said some of his clients were professional poker players who had to quit because “the margins were too small.” For most professionals, a 90% loss limit “will have a huge impact,” he says.

In Seidel’s case, there’s enough potential impact to reduce it, he says.

“Margins are really, really thin. If you’re a professional poker player, there’s no guarantee you’ll even make a profit at the end of the year,” he told CNBC Make It. “This just creates a really unbearable situation. Even elite athletes can’t overcome it.”

Fox said most amateur gamblers are “losing a lot,” so they likely won’t notice any changes when the law goes into effect next year.

But those who play heavily and make a profit or break even will feel the impact, he says.

A poker player would pay out $100,000 in winnings over the course of the year, but at the same time lose $110,000. Previously, that player could deduct losses to the extent that they could offset their winnings and not owe income tax. However, under the new rules, players will only be able to deduct $99,000 and will owe taxes on the $1,000 difference.

“You’re taxing people on money they didn’t earn,” says Doug Polk, a high-stakes professional poker player and ambassador for poker training site ClubWPT Gold.

Analysts at the Yale Institute for Budget Studies say such rules are often considered “sin taxes,” but their purpose is twofold. “On the one hand, they aim to deter harmful behavior by making it more expensive, while on the other hand they generate substantial revenues that can fund essential services,” they wrote in a February memo.

The Joint Committee on Taxation estimates the provision would generate $1.1 billion in tax revenue over eight years, but a 2025 analysis by the Tax Foundation suggests that number could shrink as gamblers’ behavior is forced to change.

Polk said that places where people might gamble, such as casinos and cardrooms, take a small share of every pot, so the distribution of outcomes for gamblers can be described as a bell curve. The peak of the curve is centered around a small loss. In his estimation, even many professionals hover around the middle of the theoretical curve.

“Essentially, most people who win at gambling are small winners,” Polk said. Under the previous rules, big gamblers could make a living winning 51 or 52 percent of the time, but the new law will greatly skew the calculations for those types of players, he says.

Polk estimates that the majority of gamblers who do not have other sources of income, such as sponsorships or social media channels, will either not be able to make a profit under the new rules or will start playing more off-the-books games.

“This is basically a game-ender for people in the high-stakes gambling space who don’t have big profits,” he says. In gambling terminology, “edge” refers to the advantage a bettor has over other players or oddsmakers. Casinos benefit in the long run by having a relatively thin edge. For example, the house edge in blackjack is usually less than 1%.

He says even for a veteran player like Seidel, it can be difficult to consistently find an edge against other world-class players. He added that not only gambling losses but also travel and lodging costs for gambling events would be subject to a 10% tax, making it too risky to aim for big profits.

“We’re going to keep it small because we don’t want the numbers to get too big when we’re only deducting 90%,” said Seidel, who is based in Las Vegas. “I’m really laid-back and avoid anything over $10,000 (buy-in tournaments), which are the tournaments I usually play. And I won’t be traveling much this year.”

Mr. Seidel has had a long and successful career, so he says he can tolerate some time off. “For me it’s acceptable not to play as much, but for people much younger than me it’s devastating,” he says.

Mr. Fox said he has had difficult conversations with clients who make a living as professional gamblers.

“I tell my clients to basically run the numbers from 2025, limit their gambling losses to 90%, assume that’s the 2026 number, and see what the impact is,” he says. “And some people are very surprised, and not in a positive way at all.”

For players who don’t work with a tax professional and aren’t as proactive about their taxes, that surprise could be deferred until next year’s tax season, which could potentially be costly, Polk says.

“It’s not really until the taxman starts knocking that people realize, ‘Oh, this is going to be a big deal,'” he says.

Polk said he expects there will be some impact on how players approach the game in 2026, “but I think we’ll see a bigger impact next year when people really feel the impact.”

So far, Seidel is one of the few high-profile players to announce that he is taking a step back from action. Some, like Mr. Polk, advocate repealing the law. Several bipartisan bills have been introduced in Congress to repeal or amend the provision, including several efforts by Sen. Catherine Cortez Masto, a Nevada Democrat who was interviewed on Polk’s YouTube channel in July. So far, none have come to a vote in either chamber.

“It’s going to have an impact on gambling as a whole, which is why I’m confident this law will eventually be repealed,” Fox said. However, he says it may take a while. “Don’t ask me if it’s going to be 2026 or 2036.”

Natalie Wu contributed reporting.

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