Latest news with #JackAndrews
Mint
11-07-2025
- Business
- Mint
The Big Beautiful Bill will kill one profession
The republicans' sprawling new tax-and-spending law affects every industry. But a seemingly modest clause deep in its 330 pages is poised to wipe out one line of work entirely: professional gambling. The provision reduces the share of wagering losses that are tax deductible from 100% to 90%. For sports bettors, who earn slim margins on large volumes, this change is catastrophic. One prominent gambler known as Jack Andrews explains that he is on track to have $7.7m in winning wagers and $7.3m in losing ones. If he can deduct only 90% of $7.3m, he would have to report $1.13m of 'phantom" income, and would owe roughly $340,000 in federal tax on his $400,000 profit. The change can even hurt losing recreational players. If you win a $10,000 casino jackpot but surrender $10,500 on the rest of your play, you would still be taxed on $550 despite losing $500. The clause's origins are mysterious. It first appeared in an amendment from the Senate Finance Committee. Multiple Republican committee members have said they do not know how it got in, although the $1.1bn of revenue it is predicted to generate may have been needed to comply with Senate rules on skirting the filibuster. Dina Titus, a Democratic representative from Nevada, has already secured Republican co-sponsors for a bill reversing the measure. The American Gaming Association also supports repeal. Nonetheless, there are no guarantees that Congress will act before the change takes effect in 2026. 'Nobody opposes a tax on winning gamblers, because they're not a winning gambler," Mr Andrews says. 'It's tough to have sympathy if you don't have any empathy." Bettors can still deduct losses from wins within a single session of play. But the Internal Revenue Service (irs) is unlikely to let punters treat a full year, or arguably even a week, as one session. In the meantime, some sports bettors are placing their hopes on a potential loophole presented by a disruptive new entrant to the industry. Last year a federal court allowed Kalshi, a platform that lets users bet against each other on whether a stated event will occur, to offer markets on elections. Three days after Donald Trump's inauguration, the site opened markets on sports as well. It has reason to be bold: Donald Trump junior is a strategic adviser, and Brian Quintenz—Mr Trump's nominee to lead Kalshi's regulator, the Commodity Futures Trading Commission—sits on its board. More than $1bn has already been bet on Kalshi's sports contracts, which are available even in states that have not legalised sports betting. The stock-trading platforms Robinhood and Webull offer its markets. And Kalshi claims that, unlike sportsbooks, it does not have to comply with states' regulations or pay them taxes. Seven states have ordered it to close these markets for their residents. However, Kalshi has won injunctions in New Jersey and Nevada preventing enforcement while courts consider the case, arguing that derivatives exchanges are federally regulated and beyond the reach of state law. The courts may eventually side with the states. And even if Kalshi prevails, any victory may be pyrrhic, because gambling firms would open their own prediction markets to shield revenue from state taxation. FanDuel, America's largest sportsbook, has already expressed interest. Kalshi is only a partial substitute for sportsbooks. It does not offer markets on scoring differentials or player statistics, or let traders combine bets into parlays. And it is of use to 'top-down" punters, who compare sites to find mispriced odds, only if they can bet elsewhere without prohibitive taxation. But it does have one big advantage: the irs has not ruled on whether prediction markets count as gambling. If pork-belly traders can net out wins and losses, why not football bettors? The agency might look askance at established gamblers shifting their income classifications abruptly. But without irs guidance, says Russell Fox, an accountant, taxpayers can do anything reasonable, defined as having at least a 40% chance of success. It is a good bet that professional gamblers, who make their living by estimating such probabilities, will take those odds.
New York Times
10-07-2025
- Business
- New York Times
How small provision added to Donald Trump's ‘Big Beautiful Bill' affects taxes for sports bettors
A small provision added to President Donald Trump's 'One Big Beautiful Bill Act' — that came to light days before the president signed the bill into law July 4 — could have a major impact on sports betting. The small change could force some bettors to pay income tax even in years when they have net losses and could significantly hike the tax burden on professional sports bettors. Advertisement The provision nearly escaped notice until alarm began to spread on X just days before Trump signed the bill into law. 'Not to be hyperbolic, but it's an extinction of professional sports betting,' a gambler who goes by the pseudonym Jack Andrews told The Athletic. Andrews is a professional gambler with a popular YouTube channel and a contributor to a MasterClass on sports and gambling. 'It is the end of my career, potentially.' One sentence of the 940-page bill says gamblers can deduct only 90 percent of their annual losses, instead of 100 percent, which has been the norm. What does that mean? Before now, when gamblers reported their betting income, they would take their gross winnings, subtract their gross losses and then report the net amount as their taxable income. Now, they're allowed to subtract only 90 percent of those losses, which means they appear to have more income, even though they don't actually have that money. That 10 percent change amounts to a whole lot if you're dealing with huge numbers. Andrews told The Athletic that, in a year, he makes between $7 million and $10 million in gross winnings. 'If it's $7 million as gross winnings and it's $6.6 million as net losses, then I have a $400,000 net,' Andrews said. 'But if it's $7 million of gross wins and you can only deduct the $6.6 times 90 percent ($5.94 million), now you have $1 million that the government sees as your net income versus $400,000. I'm looking at probably a 35 percent tax rate, so about $350,000 in tax. So now I'm paying $350,000 in taxes on a $400,000 actual income. And that's not worth it.' The bill also means that even in losing years, some gamblers might still owe income tax. For example, if you win $100,000 and lose $100,000, you can deduct only $90,000 of those losses, meaning you will owe taxes on $10,000 of income even though you did not take home any money. Advertisement The biggest impact will be on people who gamble as a professional career. These professional gamblers — some of whom are known in the industry as 'sharps' — record every wager, how much they win and lose, and report all of it in their taxes. Professional gamblers tend to wager large sums of money with small margins, which can lead to a significant profit over a year. (If you wager $100 million and lose $99 million, you still made a profit of $1 million.) These gamblers aren't just trying to win more bets; they're trying to make money even after covering the costs of betting, including cuts from casinos and taxes. 'It's going to be disastrous for them,' Nathan Goldman, CPA and tax professor at North Carolina State University, told The Athletic. 'It's going to devastate the Nevada economy. The professional gamblers bring a lot to that economy.' 'Gambling operates by the 80/20 rule, maybe 90/10,' Andrews said. 'Ninety percent of the business comes from 10 percent of the players, the VIPs.' And in Nevada, alarm bells are sounding. Rep. Dina Titus (D-Nev.), whose district includes Las Vegas, has already introduced a bill to reverse the change (more on that in a minute). 'I think this is something that a lot of people make a livelihood off of,' Rep. Ro Khanna (D-Calif.), who co-sponsored Titus' new bill, told The Athletic. 'We know people who are working at the unions or the casinos and in these industries whose livelihood will be affected.' This week, many are looking at the IRS' definition of a gambling 'session,' which typically means you can report your net winnings or losses from a whole night on a casino floor, rather than reporting every game you played while inside the casino. But with sports betting, every bet is one session. Advertisement If bettors can stretch that interpretation to say, a day, a week, etc., they could have more control over how they report their taxable income. 'I think you're going to see three types of people,' Zak Zimbile, CPA, told The Athletic. 'Those who continue to gamble and report incorrectly, those who continue to do it and adjust their definition of what a session is, and those who might completely stop altogether, which might be your high-volume, low-margin people.' Amateur sports bettors — people who make casual bets on sports betting apps such as BetMGM or FanDuel — might not feel the effects. At least not unless they get audited. 'A lot of people don't even understand that they owe taxes on gambling,' Goldman said. 'But if a bettor gets audited and the IRS reviews their sportsbook account balance, they could say, 'Wait a minute, you bet $100,000 throughout the year, you won $50,000 and lost $50,000, you actually have taxable income of $5,000.'' The deduction rule came from the Senate Finance Committee, chaired by Sen. Mike Crapo (R-Idaho). After the bill was approved by the House on May 22, the Senate Finance Committee introduced revisions June 16. The final version of the legislative text was released by the Senate on June 27 and passed by the Senate on July 1. The bill was then rushed back to the House to meet Trump's timeline, passed in the House on July 3 and was signed into law by Trump on July 4. Many in the gambling world woke up July 1 to news of the change, and it took days to become widespread. Speculation online about the reasons for the provision has run wild, ranging from straightforward accounting explanations to conspiracy theories that sportsbooks were behind the change in an attempt to eliminate sharp bettors or that the provision benefits new prediction market firms such as Kalshi, which are seen as rising competitors to sportsbooks. Advertisement 'You can deduct your full losses under this bill if you're one of these predictive sites because those aren't technically online betting sites,' Khanna told The Athletic. Prediction markets are not regulated and operate differently from sportsbooks but allow users to put money on future outcomes, similar to traditional betting. 'I just think that they were looking for revenue. Who's going to be for standing up for betting?' 'It's very popular to tax gamblers,' Goldman said. The Joint Committee on Taxation estimated that the gambling tax provision would generate over $1.1 billion in additional revenue over eight years, although some question this estimate. 'You're going to have a lot of professional gamblers stop being professional gamblers,' Goldman said. 'It's only $1.1 billion if everyone continues doing the exact same thing as before.' Politicians are scrambling to determine whether they can reverse this change. Monday, Titus introduced the FAIR BET Act, which seeks to restore the 100 percent deduction rate. Titus says there is bipartisan support, but it's too soon to know whether it will truly gain traction. FAIR BET Act by @RepDinaTitus is out. Language gets right to the point. First reported by InGame. — Fairplaygov (@fairplaygov) July 8, 2025 Titus argues this bill is a threat to legal betting and will drive professional gamblers to unregulated, illegal markets. 'We should be encouraging players to properly report their winnings and wager using legal operators,' she said in a statement. 'The Senate change will only push people to not report their winnings and to use unregulated platforms.' 'If (VIP bettors) realize this creates a glass ceiling above them, they won't want to gamble anywhere it would show up on their taxes,' Andrew said. 'All gambling income is taxable, no matter where or how it's done, but regulated gambling definitely is more likely to create a paper trail than offshore or underground gambling.' Advertisement The American Gaming Association, which lobbies for casino and sportsbook operators, initially applauded the 'One Big Beautiful Bill Act' in a post that drew ire from gamblers online. The organization has since thrown its support behind Titus' legislation. 'We are committed to working with Congresswoman Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses,' an AGA representative told The Athletic. When asked whether the AGA raised concerns about the provision, a representative from Crapo's office told The Athletic, 'The legislative text was released very widely and publicly June 16 via press release, posted on the website, reported on, etc. The American Gaming Association raised concerns with Sec. 899 of the bill. Not the 90 percent threshold.' 'If they didn't know of the tax change language between June 16, when it was published by the Senate Finance Committee, and when it hit social media around July 1, that's pretty damning,' Andrews said.
Yahoo
06-06-2025
- Business
- Yahoo
Needham Raises Pegasystems (PEGA) Target to $112 on Strong AI Outlook and Revenue Bump
We recently published a list of . In this article, we are going to take a look at where Pegasystems Inc. (NASDAQ:PEGA) stands against other trending AI stocks on Wall Street right now. On June 3rd, Needham analyst Jack Andrews raised the price target on Pegasystems Inc. (NASDAQ:PEGA) to $112.00 (from $101.00) while maintaining a 'Buy' rating. Needham's price target revision reflects Pegasystems' strategic moves in the AI sector and its positive revenue outlook. Pega made several announcements during its PegaWorld conference and Investor Day. Not only did the company unveil new AI-related products, but it also adjusted its fiscal year 2025 revenue guidance by approximately 6% to $1.7 billion, a year-over-year growth of 13.6%. An enthusiastic programmer working on a laptop, surrounded by screens displaying code. A revenue beat in the first quarter and increased confidence in the company's pipeline, despite broader economic challenges, have been attributed as drivers behind the upward revision. Based on this improved outlook, firm analysts also slightly increased their forecasts, also citing Pegasystems' Blueprint initiative and successful partnerships with Global System Integrators (GSI) as reasons. Owing to these factors, analysts expect more workloads over the coming years, leading to the rating update. Pegasystems Inc. (NASDAQ:PEGA) develops, markets, licenses, hosts, and supports enterprise software. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-06-2025
- Business
- Yahoo
Needham Raises Pegasystems (PEGA) Target to $112 on Strong AI Outlook and Revenue Bump
We recently published a list of . In this article, we are going to take a look at where Pegasystems Inc. (NASDAQ:PEGA) stands against other trending AI stocks on Wall Street right now. On June 3rd, Needham analyst Jack Andrews raised the price target on Pegasystems Inc. (NASDAQ:PEGA) to $112.00 (from $101.00) while maintaining a 'Buy' rating. Needham's price target revision reflects Pegasystems' strategic moves in the AI sector and its positive revenue outlook. Pega made several announcements during its PegaWorld conference and Investor Day. Not only did the company unveil new AI-related products, but it also adjusted its fiscal year 2025 revenue guidance by approximately 6% to $1.7 billion, a year-over-year growth of 13.6%. An enthusiastic programmer working on a laptop, surrounded by screens displaying code. A revenue beat in the first quarter and increased confidence in the company's pipeline, despite broader economic challenges, have been attributed as drivers behind the upward revision. Based on this improved outlook, firm analysts also slightly increased their forecasts, also citing Pegasystems' Blueprint initiative and successful partnerships with Global System Integrators (GSI) as reasons. Owing to these factors, analysts expect more workloads over the coming years, leading to the rating update. Pegasystems Inc. (NASDAQ:PEGA) develops, markets, licenses, hosts, and supports enterprise software. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
