DraftKings CEO Speaks Out on Trump Gambling Tax
The CEO of DraftKings, Jason Robins, has been speaking out against a new gambling tax provision in President Donald Trump’s recent economic legislation.
In an interview with CNBC’s Jim Cramer, Robins expressed concern that the provision, which limits how much of an individual’s gambling losses can be deducted, could end up with gamblers paying income tax on money they didn’t receive.
“I do think it’s something that doesn’t make sense. If you can’t deduct all your losses, you know, how does that make sense that you pay income tax on something that’s not actually income,” said Robins.
Previously, gamblers could deduct 100% of their losses, but the new rule reduces that to 90%, starting in 2026. That means someone who won $2,000 and lost $2,000 in the same year would have to pay tax on $200 of net winnings, even though they just broke even.
Robins suggested that the change was a technical move to comply with Senate budget rules and also said that DraftKings, one of the best sports betting sites and a top US online casino, is working with lawmakers to overturn it.
Republicans backpedal
Robins isn’t alone in his criticism. The backlash to the gambling tax hike is growing on Capitol Hill, where some Republican lawmakers who voted for the bill admit they didn’t spot the provision.
Rep. Jason Smith, chair of the House Ways and Means Committee, said it was a mistake, and Senators Ted Cruz and Bill Hagerty are backing a bipartisan bill to reverse it.
“It’s unfair. It makes no sense. The income tax is designed to tax actual income. For example, playing poker for profession, not allowing them to deduct their losses means they’re paying taxes not on their actual income. I think we should fix it,” Cruz told reporters.
The bill, introduced by Sen. Jacky Rosen, aims to restore the full deduction for gambling losses. However, it faces opposition from some Senate Republicans who are resistant to any amendment to the megabill.
DraftKings faces lawsuit over gambling promotions
As DraftKings battles the tax change in Washington, it’s also facing legal problems. A new federal lawsuit in Pennsylvania accuses the company of using deceptive advertising to encourage risky betting behavior.
The suit claims DraftKings promoted offers that appeared to match user deposits or offer ‘risk-free’ bets, which required users to wager large sums within short periods to qualify. According to reports, one of the plaintiffs lost over $50,000 in a few months. A similar lawsuit in New York determined the company did not mislead bettors with DraftKings promos.
The case highlights growing scrutiny of the online gambling industry as states like Massachusetts consider expanding into the real-money online casino market. While DraftKings says regulation would ensure consumer protection and boost tax revenue, critics warn that further expansion could trigger a mental health crisis.
As lawmakers weigh public revenue against public health, DraftKings is now at the center of two critical debates: on Capitol Hill and in the courts.
