Pro poker player says new tax laws forced him into semi-retirement

Professional poker player Erik Seidel says he selected to semi-remove this 12 months — however not as a result of his profession was slowing down.

Seidel performed his first main event in 1988, ending as runner-up within the World Series of Poker primary occasion. He grew to become a full-time skilled poker player in 1995, and over the course of his profession he has racked up winnings of greater than $48 million taking part in in reside poker tournaments, according to the Hendon Mob Poker Databasea web-based compendium of poker stats.

In latest years, the 66-year-old estimates he is performed roughly 130 to 150 occasions a 12 months, together with instances he is purchased again in after being eradicated. Last 12 months, his complete event winnings topped $2.8 million, in line with Hendon Mob.

But this 12 months, he says, he plans to play possibly 1 / 4 of the tournaments he often performs, and nearly no “high-roller” occasions, which value $25,000 or extra to enter. The motive is straightforward, he says: taxes.

President Donald Trump’s One Big Beautiful Bill Actwhich handed final July, features a provision that adjustments the best way gamblers can deduct losses. Taxpayers nonetheless should deal with gambling winnings as revenue, however they will now not use all of their losses to completely offset their winnings. Rather, beginning in tax 12 months 2026, they will solely deduct as much as 90% of their losses.

That’s left some skilled gamers cautious of spending an excessive amount of cash to play, lest they discover their revenue utterly eroded by the ten% disparity within the tax guidelines, says Russ Fox, an enrolled agent and principal at Clayton Financial and Tax, a agency which makes a speciality of playing tax.

Fox says a number of of his purchasers are skilled poker gamers who needed to cease as a result of “the margins are just too small.” For most professionals, the 90% loss limitation is “going to have a greater impact,” he says.

In Seidel’s case, he says, it is sufficient of a possible influence for him to chop again.

“The margins are really, really thin. If you’re a professional poker player, you’re not even guaranteed to have a profit at the end of the year,” he tells CNBC Make It. “This just creates a situation where it’s really untenable. Even the elite players, they can’t overcome it.”

amateur gamblers possible will not discover something completely different when the regulation takes impact subsequent 12 months, since most of them “lose significantly,” says Fox.

But those that play at excessive volumes and switch a revenue or break even will really feel the influence, he says.

Say a poker player pays realizes $100,000 in winnings over the course of the 12 months, but additionally incurs $110,000 in losses. In earlier years, that player might deduct their losses to the extent that they offset their winnings and owe no revenue tax. Under the new rulesnonetheless, the player might deduct solely $99,000, which means they’d owe tax on the $1,000 distinction.

“You’re taxing people on money they didn’t make,” says Doug Polk, a high-stakes skilled poker player and ambassador for poker coaching website ClubWPT Gold.

Rules like these, typically thought of “tax-free,” are supposed to serve a twin function, say analysts on the Budget Lab at Yale University. “On the one hand, they aim to discourage harmful behavior by making the behavior more expensive, while on the other hand, they generate substantial revenue that can fund essential services,” they wrote in a February note.

The Joint Committee on Taxation estimated that the supply would generate $1.1 billion in tax income over eight years, though that quantity might shrink as gamblers’ habits is forced to alter, in line with a 2025 analysis from the Tax Foundation.

Polk says you’ll be able to image the distribution of gamblers’ outcomes on a bell curve, with the height of the curve centered round a slight loss, as a result of locations the place you may gamble, comparable to casinos or card rooms, take a small minimize of each pot. Even many execs, he estimates, hover across the center of the theoretical curve.

“Essentially, most people who are winning gambling will be small winners,” Polk says. Under the earlier guidelines, a high-volume gambler might earn a residing successful 51% or 52% of the time, he says, however the new regulation skews the maths closely in opposition to that form of player.

Polk estimates that almost all of gamblers who do not have other sources of incomecomparable to sponsorships or social media channels, will both fail to show a revenue beneath the new guidelines or start taking part in in additional off-the-books video games.

“It’s basically a game-ender for people who are in high-volume gambling fields who don’t have substantial, substantial edges,” he says. In playing parlance, an “edge” refers back to the benefit a bettor has over different gamers or over oddsmakers. Casinos earn cash over the long run by having a comparatively skinny edge — blackjack, for example, typically has a house edge of less than 1%.

Even for veteran gamers like Seidel, constantly discovering an edge in opposition to different world-class gamers will be robust, he says. Add in a ten% tax drag — on not solely playing losses but additionally on travel and lodging expenses for gambling events — and aiming for higher earnings turns into an excessive amount of of a threat, he provides.

“I’m going smaller because I don’t want the numbers to get too high if I’m only able to deduct 90%,” says Seidel, who’s based mostly in Las Vegas. “I’ve just been really taking it easy and avoiding $10K [buy-in tournaments] and above, which are the tournaments that I normally play, and not traveling as much this year.”

Because Seidel has had an extended and profitable profession, he can stand up to a small sabbaticalhe says. “I can afford to not play as much, but it’s a devastating thing for people who are much younger than me,” he says.

Fox says he is had some troublesome talks together with his purchasers who make a residing as skilled gamblers.

“I’m telling clients to basically run their numbers from 2025 and limit their gambling losses to 90% and assume that was your 2026 number to see what the impact would be,” he says. “And a few have been very surprised. Not in a positive manner.”

For gamers who do not work with a tax professional and who aren’t as proactive about their taxes, that shock is perhaps delayed till tax time subsequent 12 months — and probably expensive, says Polk.

“You’re not really going to see people realize, ‘Oh God, this is going to be bad’ until the tax man starts knocking,” he says.

Polk expects to see some influence on how gamers method the sport in 2026, “but a more substantial one next year, when people actually get the sticker shock of it.”

For now, Seidel is among the few distinguished gamers to announce a step away from the motion. Others, like Polk, have been advocating for the regulation to be overturned. Several bipartisan payments have been launched to Congress to rethink or modify the supply, together with multiple efforts from Sen. Catherine Cortez Masto, D-Nev., who sat for an interview on Polk’s YouTube channel in July. So far, none have made it to a vote in both chamber.

“It’s going to have an impact throughout gambling, which is why I am certain this law will be repeated one day,” says Fox. However, it could take some time, he says: “Don’t ask me if it will be 2026 or 2036.”

Natalie Wu contributed reporting.

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