Skilled poker participant Erik Seidel says he selected to semi-retire this 12 months — however now not as a result of his occupation used to be slowing down.
Seidel performed his first main event in 1988, completing as runner-up within the Global Sequence of Poker major match. He become a full-time skilled poker participant in 1995, and over the process his occupation has racked up winnings of greater than $48 million enjoying in reside poker tournaments, in line with the Hendon Mob Poker Database, an internet compendium of poker stats.
In recent times, the 66-year-old estimates he is performed kind of 130 to 150 occasions a 12 months, together with occasions he is purchased again in after being eradicated. Ultimate 12 months, his overall event winnings crowned $2.8 million, in line with Hendon Mob.
However this 12 months, he says, he plans to play possibly 1 / 4 of the tournaments he normally performs, and just about no “high-roller” occasions, which value $25,000 or extra to go into. The reason being easy, he says: taxes.
President Donald Trump’s One Giant Stunning Invoice Act, which handed remaining July, features a provision that adjustments the way in which gamblers can deduct losses. Taxpayers nonetheless should deal with playing winnings as source of revenue, however they may be able to not use all in their losses to totally offset their winnings. Fairly, beginning in tax 12 months 2026, they may be able to handiest deduct as much as 90% in their losses.
That is left some skilled gamers cautious of spending an excessive amount of cash to play, lest they to find their benefit totally eroded through the ten% disparity within the tax regulations, says Russ Fox, an enrolled agent and predominant at Clayton Monetary and Tax, a company which focuses on playing tax.
Fox says a number of of his purchasers are skilled poker gamers who needed to prevent as a result of “the margins are simply too small.” For many execs, the 90% loss limitation is “going to have a significant have an effect on,” he says.
In Seidel’s case, he says, it is sufficient of a possible have an effect on for him to scale back.
“The margins are truly, truly skinny. If you are a qualified poker participant, you might be now not even assured to have a benefit on the finish of the 12 months,” he tells CNBC Make It. “This simply creates a state of affairs the place it is truly untenable. Even the elite gamers, they may be able to’t triumph over it.”
How the tax regulation may just harm skilled gamblers
Beginner gamblers most probably would possibly not understand anything else other when the regulation takes impact subsequent 12 months, since maximum of them “lose considerably,” says Fox.
However those that play in excessive volumes and switch a benefit or spoil even will really feel the have an effect on, he says.
Say a poker participant can pay realizes $100,000 in winnings over the process the 12 months, but in addition incurs $110,000 in losses. In earlier years, that participant may just deduct their losses to the level that they offset their winnings and owe no source of revenue tax. Below the brand new regulations, alternatively, the participant may just deduct handiest $99,000, which means they might owe tax at the $1,000 distinction.
“You are taxing folks on cash they did not make,” says Doug Polk, a high-stakes skilled poker participant and ambassador for poker coaching web site ClubWPT Gold.
Regulations like those, ceaselessly regarded as “sin taxes,” are supposed to serve a twin objective, say analysts on the Funds Lab at Yale College. “At the one hand, they target to deter damaging habits through making the habits dearer, whilst however, they generate really extensive earnings that may fund crucial services and products,” they wrote in a February be aware.
The Joint Committee on Taxation estimated that the availability would generate $1.1 billion in tax earnings over 8 years, regardless that that quantity may just shrink as gamblers’ habits is pressured to switch, in line with a 2025 research from the Tax Basis.
From left, Erik Seidel and David “Chino” Rheem compete on the ultimate desk of the Epic Poker League Inaugural Season At Fingers On line casino Lodge all the way through the Major Match Day 4 on August 12, 2011 in Las Vegas, Nevada.
Jeff Bottari | Getty Pictures Game | Getty Pictures
Polk says you’ll be able to image the distribution of gamblers’ effects on a bell curve, with the height of the curve focused round a slight loss, as a result of puts the place it’s possible you’ll 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.
“Necessarily, most of the people which are successful playing might be small winners,” Polk says. Below the former regulations, a high-volume gambler may just become profitable successful 51% or 52% of the time, he says, however the brand new regulation skews the maths closely towards that more or less participant.
Polk estimates that almost all of gamblers who should not have different resources of source of revenue, comparable to sponsorships or social media channels, will both fail to show a benefit beneath the brand new regulations or start enjoying in additional off-the-books video games.
“It is mainly a game-ender for those who are in high-volume playing fields who shouldn’t have really extensive, really extensive 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 longer term through having a slightly skinny edge — blackjack, as an example, in most cases has a space fringe of not up to 1%.
Gamblers may just finally end up with ‘decal surprise’
Even for veteran gamers like Seidel, constantly discovering an edge towards different world-class gamers can also be tricky, he says. Upload in a ten% tax drag — on now not handiest playing losses but in addition on go back and forth and accommodation bills for playing occasions — and aiming for main income turns into an excessive amount of of a chance, he provides.
“I am going smaller as a result of I do not want the numbers to get too excessive if I am handiest in a position to deduct 90%,” says Seidel, who is primarily based in Las Vegas. “I have simply been truly taking it simple and heading off $10K [buy-in tournaments] and above, which might be the tournaments that I usually play, and now not touring as a lot this 12 months.”
As a result of Seidel has had a protracted and a hit occupation, he can face up to a small sabbatical, he says. “I will be able to come up with the money for not to play as a lot, however it is a devastating factor for people who find themselves a lot more youthful than me,” he says.
Fox says he is had some tough talks along with his purchasers who make a residing as skilled gamblers.
“I am telling purchasers to mainly run their numbers from 2025 and restrict their playing losses to 90% and think that used to be your 2026 quantity to peer what the have an effect on could be,” he says. “And a couple of were very shocked. No longer in a favorable way.”
For gamers who do not paintings with a tax skilled and who don’t seem to be as proactive about their taxes, that wonder may well be behind schedule till tax time subsequent 12 months — and probably pricey, says Polk.
“You are now not truly going to peer folks notice, ‘Oh God, that is going to be dangerous’ till the tax guy begins knocking,” he says.
Polk expects to peer some have an effect on on how gamers means the sport in 2026, “however a extra really extensive one subsequent 12 months, when folks if truth be told get the decal surprise of it.”
For now, Seidel is without doubt one of the few outstanding gamers to announce a step clear of the motion. Others, like Polk, were advocating for the regulation to be overturned. A number of bipartisan expenses were offered to Congress to repeal or adjust the availability, together with more than one efforts from Sen. Catherine Cortez Masto, D-Nev., who sat for an interview on Polk’s YouTube channel in July. Thus far, none have made it to a vote in both chamber.
“It is going to have an have an effect on all over playing, which is why I’m sure this regulation might be repealed someday,” says Fox. On the other hand, it is going to take a little time, he says: “Do not inquire from me if it is going to be 2026 or 2036.”
Natalie Wu contributed reporting.
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