The 2026 FIFA World Cup is expected to generate $150 billion in betting, with millions of people planning to place their first bets. However, new tax rules may leave some bettors with 'phantom income,' meaning they may owe taxes even when they lose money overall.
Under the new IRS tax rules, gamblers can only deduct losses against their winnings up to 90%. This means that if a bettor wins $3,000 and loses $4,000, they can only deduct $2,700 of the losses, leaving $300 as taxable income.
Experts warn that many first-time bettors may not understand the new tax rules and may end up owing taxes even when they lose money. To avoid problems, bettors are advised to keep detailed records of every wager, including dates, betting slips, stake amounts, winnings, and losses.
State tax rules can differ from federal rules, and some states may require reporting at the $600 level. Bettors are advised to check local laws before placing any wagers and to be aware of the new tax rules.
