President's Air Force One Comments Spark Debate on Fiscal Impact for Millions of Gamblers and Potential Revenue Losses

December 11, 2025 | Washington, D.C. - President Donald Trump signaled openness Tuesday to scrapping federal taxes on gambling winnings, a potential windfall for the roughly 60% of American adults who gamble annually but a move that could further strain the U.S. Treasury amid ongoing efforts to slash taxes on tips, overtime, and Social Security benefits.

Speaking to reporters aboard Air Force One en route to a campaign-style rally in Pennsylvania, Trump responded to a question about the idea with characteristic noncommittal flair: "We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime. No tax on gambling winnings? I don't know. I'm gonna have to think about that." The offhand remark, first reported by Fox Business, quickly ignited speculation across financial circles and the booming gambling industry, from Las Vegas casinos to online sportsbooks.

The proposal—if it advances—would mark another chapter in Trump's aggressive tax-cutting agenda, building on the One Big Beautiful Bill Act (OBBBA), which he signed into law over the summer. That legislation already exempted tips and overtime pay from federal income taxes, fulfilling campaign promises aimed at bolstering working-class wallets. Eliminating the levy on gambling earnings could extend similar relief to recreational bettors, many of whom gripe about the IRS's 24% withholding on winnings over $5,000—a rule that has long been a sore spot for jackpot winners.

Under current IRS guidelines, all gambling income—from lotteries, horse races, and casino slots to sports bets—must be reported as "other income" on Form 1040, taxed at an individual's marginal rate. Losses can be deducted, but only up to the amount of winnings reported, leaving net winners on the hook. The OBBBA complicated matters further by capping loss deductions at 90% starting in 2026, drawing bipartisan backlash from lawmakers who decried it as an unintended gut-punch to gamblers. Trump's floated idea could effectively nullify that change for winners, though it wouldn't retroactively aid those hit by losses.

The gambling sector, which has exploded since the 2018 Supreme Court ruling legalizing sports betting nationwide, stands to gain big. Industry data shows about 30% of adults visited physical casinos last year, while 21% placed sports wagers, generating billions in revenue. "This could be a game-changer for casual players who see a chunk of their fun money vanish come tax time," said American Gaming Association spokesperson Bill Miller in a statement to *Grok News*. "It aligns with the president's pro-growth vision, potentially boosting tourism and participation without the taxman taking a cut."

Economists, however, sounded alarms over the fiscal ripple effects. While the IRS doesn't break out gambling-specific revenue, estimates peg it at $10–15 billion annually, a figure dwarfed by Trump's broader ambitions—like his recent musings on phasing out income taxes entirely through tariff hikes and economic growth. "Even if it's a drop in the bucket compared to the $2 trillion in potential tariff windfalls, every exemption adds to the deficit," warned Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "This isn't just about Vegas; it's about whether we're funding roads and schools with winners' luck or borrowing from the future."

Trump's comments come against a backdrop of resurgent optimism in his second term, with Republicans controlling Congress and eyeing a reconciliation package to embed more tax breaks. Allies like economist Stephen Moore, a former Trump adviser, have floated similar ideas, arguing that untaxed winnings could stimulate consumer spending. Critics, including Senate Finance Committee Democrats, called it "another giveaway to the house—except this time, the house is Wall Street and Sin City."

For everyday Americans, the stakes are personal. Take Mike Reynolds, a 45-year-old construction worker from Reno, Nevada, who hit a $12,000 slot jackpot last month. "I lost half to Uncle Sam before I even cashed out," Reynolds told *Grok News* outside a local casino. "If Trump pulls this off, I'll be back betting every weekend—no more guilt trips at H&R Block."

White House Press Secretary Karine Jean-Pierre downplayed the remarks as exploratory, telling reporters Wednesday: "The president is always thinking big on taxes—relief for the American people. But any changes will go through the proper channels." No formal proposal has been drafted, and insiders say it's unlikely to move before mid-2026, when OBBBA's loss cap kicks in.

As the idea percolates, it underscores Trump's unorthodox style: floating policies mid-flight that could reshape lives from blackjack tables to balance sheets. Whether it becomes law or fades like so many Air Force One asides, one thing's clear—the bet is on, and the American gambler might just get a better hand.