President Donald Trump has not ruled out the possibility of eliminating taxes on gambling winnings, telling reporters Tuesday that he would “think” about the idea. (Credit: Swimming pool)
President Donald Trump said Tuesday he would consider eliminating federal taxes on gambling winnings, a move that would bolster his administration’s efforts to cut taxes on everyday income, including tips and overtime.
When asked at a rally on Air Force One whether he would potentially eliminate the tax on gambling income, Trump said he would keep the option open.
“We don’t have a tip tax, we don’t have a Social Security tax and we don’t have an overtime tax,” he said. “No tax on gambling winnings, I don’t know. I’ll have to think about it.”
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President Donald Trump told reporters Tuesday that he would consider eliminating taxes on gambling winnings. (Studio Minerva/Getty Images/Getty Images)
The One Big Beautiful Bill Act (OBBBA), signed into law this summer by Trump, included “no tax on tips” and “no tax on overtime” provisions, allowing individuals to claim further reductions.
Nearly 60% of all U.S. adults have gambled in the past year, according to the American Gaming Association, with 30% playing at a brick-and-mortar casino and 21% placing sports bets.
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President Trump said Tuesday he would “consider” cutting taxes on gambling revenue. (Alex Wong/Getty Images/Getty Images)
A W-2G form is typically issued to anyone earning more than $600, and the regular withholding rate for gambling winnings of $5,000 or more is 24%, according to the Internal Revenue Service (IRS). The tax applies to lotteries, raffles, horse racing and casinos, among other forms of gambling.
Up to 28% of the prize could be withheld for federal income taxes if the individual wins more than $5,000, and that amount rises to 31% if a Social Security number is not provided to gambling establishments.
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A casino guest won more than $1 million on a “Wheel of Fortune” slot machine in Nevada on October 17, 2025, after turning a $3 bet into a life-changing jackpot. (David Becker/Getty Images/Getty Images)
All gambling winnings must be reported on a Form 1040, and although gambling losses for the year can be deducted, they cannot exceed the amount of gambling income.
