TaxVigWhat is phantom gambling income?
Phantom income is money you pay tax on but never kept. For bettors it comes from the 2026 change to the loss deduction: you can deduct only 90% of your losses, capped by your winnings (26 U.S.C. 165(d)).
Example: you win $200,000 and lose $210,000. You are down $10,000 for the year, but you can deduct only $189,000 of losses, so $11,000 is taxed.
The more you bet, the bigger the gap, because it grows with your total losses, not with your profit. Counting by session usually gives smaller totals than counting every bet, so the method you use matters too.
A calculator, not tax advice. Show this to your CPA. Compare both counting methods with your own totals.