President Trump is considering eliminating federal taxes on gambling winnings, a potential move that would put more money back into the pockets of hardworking Americans while continuing his administration’s aggressive push to slash burdensome taxation.
Story Highlights
- Trump says he will “think about” eliminating taxes on gambling winnings during Air Force One gaggle
- Move would expand his tax relief agenda that already eliminated taxes on tips and overtime
- Current federal tax rate hits gambling winners with up to 31% withholding on larger prizes
- Nearly 60% of American adults gambled in the past year, making this a widespread issue
Trump Weighs Major Tax Relief for Gambling Winners
President Donald Trump told reporters aboard Air Force One on Tuesday, December 9, 2025, that he would consider eliminating federal taxes on gambling winnings. When asked directly about nixing taxes on gambling earnings, Trump responded, “No tax on gambling winnings, I don’t know. I’m gonna have to think about that.”
The statement came as the President highlighted his administration’s existing tax relief measures, including eliminating taxes on tips, Social Security, and overtime pay.
Trump says he will 'think about' eliminating tax on gambling winnings https://t.co/T35kQXLFW9
— FOX Business (@FoxBusiness) December 10, 2025
Building on Successful Tax Reduction Legacy
The potential gambling tax elimination would expand Trump’s One Big Beautiful Bill Act (OBBBA), signed into law over the summer. This legislation already delivered on campaign promises by including “no tax on tips” and “no tax on overtime” provisions, allowing working Americans to claim significant new tax reductions.
Trump emphasized these achievements when discussing the gambling tax possibility, stating, “We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime.”
Current Tax Burden Hits Americans Hard
Under existing federal tax policy, gambling winners face substantial tax penalties that eat into their earnings. The Internal Revenue Service requires a W-2G form for anyone winning over $600, with a regular withholding rate of 24% for gambling winnings of $5,000 or more.
The tax burden increases dramatically for larger prizes, with up to 28% withheld for federal income tax on winnings exceeding $5,000. Winners who cannot provide a Social Security number face an even steeper 31% withholding rate.
Widespread Impact Across American Families
The gambling tax issue affects millions of Americans who participate in legal gaming activities. According to the American Gaming Association, nearly 60% of all American adults gambled in the past year, with 30% visiting physical casinos and 21% placing sports bets.
Current tax laws apply to all forms of gambling including lotteries, raffles, horse races, and casinos. All gambling winnings must be reported on Form 1040, though losses can be deducted up to the amount of gambling income earned during the year.
