In a recent episode of Verdict with Ted Cruz, the Texas senator revealed a hidden tax provision that could deal a bad beat to professional poker players across the U.S. The change, buried deep in a massive federal bill, alters how gambling losses are deducted—potentially taxing players on money they never actually earned.

What’s the Deal with the New Rule?

Under the previous law, gamblers could deduct 100% of their losses from their winnings, paying taxes only on their net income. The new provision caps that deduction at 90%, meaning players could owe taxes on phantom profits.

Senator Cruz broke it down with a real-world example:

A poker pro wins $130,000 and loses $100,000.
Instead of paying taxes on the $30,000 profit, they’d now be taxed on $40,000—$10,000 more than they actually made.

Even worse, if a player breaks even—winning and losing $100,000—they’d still owe taxes on $10,000.

Cruz’s Personal Connection to Poker

Cruz, a longtime poker fan who has played with legends like Doyle Brunson and Phil Hellmuth, emphasized the skill and strategy involved in the game. He shared stories from his appearances on Poker After Dark, including a memorable hand where he busted out Brunson—an experience he called “a bucket list moment.”

A Bipartisan Push to Fix the Flawed Law

Upon learning about the provision—passed during a late-night legislative rush—Cruz teamed up with:

Together, they’ve introduced legislation to restore full deductibility of gambling losses, ensuring that poker professionals are taxed only on actual income.

Will the Fix Go Through?

Cruz is cautiously optimistic. “I don’t know of a senator, Republican or Democrat, who’s arguing this is a good idea,” he said. While changing federal law is never easy, the bipartisan support and clear unfairness of the rule give this effort a strong chance.

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The Jesse Kelly Show