Adam Roarty is a journalist covering sports betting, regulation, and industry innovation for CasinoBeats. His coverage includes tax increases in the UK, covering breaking stories in the ever-evolving landscape of US betting such as the...
Read Full BioCasino dealers will not have to pay taxes on tips they receive in casino chips under new tax regulations implemented by Donald Trump’s One Big Beautiful Bill Act (OBBBA).
Under the regulations, casino chips are classed as a form of “cash tips,” which are tax-deductible. In addition to casino chips, card payments, checks, and mobile payments are also classified as cash tips.
The new “no tax on tips” rules allow workers to deduct up to $25,000 from their taxable income. Tips must be voluntary, not negotiated, and not mandatory charges, and are limited to cash tips, excluding tickets, meals, services, and most digital assets.
The Federal Register released the terms on Monday, which explicitly mentions casino dealers as workers who customarily receive tips. It also lists casino chips as falling under the cash tips category, as they are “readily exchangeable for a fixed amount in cash.”
Trump promised the “no tax on tips” policy in his presidential campaign, stating, “If you’re a restaurant worker, a server, a valet, a bell hop, a bartender, one of my caddies, your tips will be 100% yours.”
Change Encourages Workers to Report Tips
Workers in the Gaming Industry Tip Compliance Agreement (GITCA) program, which tracks casino employee tips, are eligible for the deductions if they report tips according to program rules.
Previous studies by the IRS have found that as much as half of tips go unreported. The GITCA is a voluntary program, and employees can opt out and track their own tips if they so wish. However, this may make it more complicated to claim the deductions.
Paying taxes on all reported tips encouraged many to hide the actual amount, but the new tax change will incentivize workers to report more accurately. This would avoid any IRS audits, which could result in penalties if unreported income were discovered.
Gambling Losses Not Fully Tax Deductible
Another tax change implemented by Trump’s OBBBA limits gamblers from deducting losses from winnings before paying tax. There have been moves to repeal the tax change, which only allows 90% of losses to be deducted.
Rep. Dina Titus has been one of the leading voices against the change and proposed the FAIR BET Act to reverse the rule. She also attempted to add the repeal as an amendment to the National Defense Authorization Act (NDAA), but lawmakers rejected her proposal.
Additionally, Senator Catherine Cortez Masto introduced the FULL HOUSE Act, which similarly proposes to reverse the OBBBA tax change. However, her attempts to fast-track the legislation were also thwarted. Both bills remain active in their respective chambers.
The “no tax on tips” rule applies from taxable years beginning after December 31, 2024. The limit on deducting gambling losses from winnings will come into force from next year, unless either of the proposals passes in time to reverse the change.
