DraftKings CEO questions new gambling tax rule limiting loss deductions

A new gambling tax rule in President Donald Trump’s proposed megabill is drawing criticism from DraftKings CEO Jason Robins, who questioned the logic behind limiting gamblers to deducting only 90% of their losses.

“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,” Robins told CNBC.

Previously, gamblers were allowed to deduct 100% of their losses against winnings, meaning they paid taxes only on net winnings. Under the new rule, only 90% of losses can be deducted. For example, if a bettor wins $1,000 and loses $1,000, they may now only deduct $900, resulting in $100 of taxable income.

Robins referred to the change as “a very strange change” and suggested it was added due to a “technicality” linked to the Byrd Rule. The Byrd Rule restricts the inclusion of provisions unrelated to federal revenue or spending in reconciliation bills. He said there is some “appetite” to amend the provision and confirmed that DraftKings is engaging with lawmakers on the matter.

DraftKings reported its latest quarterly results Wednesday after the market closed, posting new records for revenue, net income, and EBITDA. Company management attributed performance to “continued healthy customer engagement, efficient acquisition of new customers, higher structural sportsbook hold percentage, and sportsbook-friendly outcomes.”

The company’s stock rose more than 3% in extended trading following the report.

Robins also commented on the status of online sports betting legislation across the United States. Robins said he thinks progress has been made across the board and suggested that the practice may eventually be legal in more states.

Online sports betting is currently legal in 34 states, based on data from the American Gaming Association.

“I can’t imagine a world where you can, you know, bet in 30, 40 plus states, and California is not one of them, and Texas is not one of them,” Robins said.