The Math Doesn’t Work Anymore
Erik Seidel sat in his Las Vegas home office, calculator in hand, running the same numbers for the third time. The result hadn’t changed. Starting in 2026, he’d only be able to deduct 90% of his tournament losses against his winnings. That 10% difference? It was enough to make him put down the calculator and pick up his phone to call CNBC.
“I’m cutting back to about 25% of the tournaments I used to play,” Seidel told the financial news outlet. The eight-time bracelet winner and member of the Poker Hall of Fame wasn’t being dramatic. For a player who grinds out profits across hundreds of events each year, the margins just got razor-thin.
When 10% Changes Everything
The new tax rules sound minor on paper. Professional gamblers can still deduct losses - just not all of them. But run the math on a typical tournament year and the picture gets ugly fast.
Say you play $500K in tournament buy-ins and cash for $600K. Under the old rules, you’d pay taxes on $100K profit. Now? You’re taxed on $150K because that last $50K in losses doesn’t count. Your actual profit stays at $100K, but Uncle Sam treats it like $150K.
For mid-stakes grinders, this kills the business model. High-stakes pros like Seidel can absorb it better, but even they’re reconsidering.
More Than Just Seidel
Russ Fox has been doing taxes for poker players since before the Moneymaker boom. His assessment? Brutal.
“For most professionals, the 90% loss limitation is going to have a major impact,” Fox explained. He’s already seeing clients walk away from full-time play. Not cutting back like Seidel - completely walking away.
The timing couldn’t be worse. Live poker revenues are up. Tournament fields are growing. But the very players who drive the ecosystem - the pros who play week after week - are getting squeezed out by tax policy.
The Ripple Effect Nobody’s Discussing
Think tournament poker survives just fine without professionals? Think again.
Pros don’t just fill seats. They start games. They play through dead periods. They travel to smaller stops that recreational players skip. Pull them out and you get:
- Smaller fields at non-marquee events
- More tournaments failing to meet guarantees
- Reduced schedules as operators cut unprofitable stops
- Less liquidity in side games
- Fewer satellite qualifiers running
We’re already seeing it. Regional tours that depend on a core group of traveling pros are struggling to maintain numbers.
Why Congress Probably Won’t Fix This
Rep. Dina Titus is pushing the FAIR BET Act to restore full deductibility. She’s got bipartisan support. She’s got logical arguments about not taxing phantom profits.
She’s also got almost zero chance.
Professional gamblers don’t exactly form a powerful voting bloc. And in an era of budget battles, giving tax breaks to poker players? Good luck selling that to constituents struggling with grocery bills.
The provision wasn’t even supposed to target poker pros - it got added “in the dark of night” as part of broader reforms. But now it’s law, and laws are easier to pass than repeal.
Adapt or Die
Seidel’s 75% cut might seem extreme, but it’s calculated. He’s not quitting poker - he’s optimizing for the new reality. Play fewer events. Be more selective. Focus on higher-EV spots.
Other pros are taking different approaches:
- Moving to cash games (different tax treatment)
- Relocating to tax-friendlier countries
- Transitioning to staking/coaching
- Playing under backing deals that shift the tax burden
The irony? This might actually increase the skill edge. Fewer pros means softer fields for those who remain. But it also means less action, smaller prizepools, and a generally less vibrant tournament scene.
The Long Game
Seidel framed his decision as temporary, hoping for eventual tax reform. But temporary has a way of becoming permanent in poker.
Remember when online poker was supposed to be back “within a year” after Black Friday? That was 2011. Still waiting in most states.
The tournament circuit will survive this. Poker always adapts. But it’ll look different. More recreational-focused. Less professional. Maybe that’s what regulators wanted all along.
For players like Seidel who’ve spent decades perfecting their craft, it’s a bitter pill. You can beat the players. You can beat the rake. But beating the tax code? That’s a game where the house edge just went up 10%.
And unlike poker, it’s not a game you can choose not to play.
