The TCJA limits the ability of professional gamblers to deduct expenses. Although gamblers are required to report gambling winnings in gross income, the deductions they can claim depend on whether their gambling is at the trade or business level.
Before the TCJA, professional gamblers could fully deduct nonwagering business expenses beyond wagering gains. The amended Sec. 165(d) allows professional gamblers to deduct wagering losses and nonwagering business expenses only to the extent of their gambling winnings and no longer allows them to generate a net operating loss from gambling.