UFC President and CEO Dana White sent a letter to President Donald Trump, urging the President to consider a reversal of the new 90% cap on gambling losses. Dated May 11, White’s appeal spotlights how the One Big Beautiful Bill Act creates unfair tax outcomes for bettors and endangers the legal sports betting sector. Traders responded instantly, driving Kalshi volumes on cap repeal contracts past $3 million within hours.
White’s letter links directly to Trump’s No Tax on Tips policy. White argues that this deduction cap is essentially a tax that discourages not only betting overall but also gamblers’ generosity in tipping and spending in and around gaming venues.
White’s letter praises the Trump administration’s pro-business agenda overall but calls out this specific provision as a damaging setback for the sports gaming industry.
Dana White’s Direct Appeal to Trump on the Gambling Loss Deduction Cap
Written on official UFC letterhead, the letter thanks Trump for passing the One Big Beautiful Bill Act while targeting Section 70114. That section of OBBBA cut the longstanding 100% deduction for gambling losses to 90% effective January 1, 2026. White calls the change “irrational” because bettors can now owe taxes after breaking even or even losing money overall. He urges swift Congressional action, calling it common-sense support for UFC fighters, fans, and businesses in and around sports gaming.
White highlights the impact of the change to the deduction limit on the UFC, which relies on vibrant legal betting to increase fan engagement, broadcast value, and sponsorships. Gambling newsletter writer Dustin Gouker shared the letter publicly on X, where it spread rapidly.
How the 90% Cap Creates Phantom Income Taxes
The new Section 70114 limits bettors to deducting only 90% of their wagering losses while still taxing 100% of their winnings.
As a very simple example, if you placed two bets of $100,000 each and won one and lost the other, you would have netted $0, but because the deductible limit is now 90%, you would still be liable for taxes on $10,000. In summary, you won nothing, but you’re still being taxed on $10K.
This is referred to as a “phantom income tax” since you’re being taxed on income you never received.
Bettors now face surprise tax bills from the IRS that exceed their actual profits. Dana White insists that the repeal of this provisional change is vital to protecting the combat sports ecosystem he helped build.
Link to Trump’s No Tax on Tips Policy and Kalshi Market Reaction
White tied the 90% cap rule to Trump’s No Tax on Tips initiative. He suggests that taxed winners tip less and wager less, thereby undercutting the No Tax on Tip policy’s benefits for service workers in gaming. The letter positions repeal as another win for American businesses and everyday participants.
On Kalshi, the repeal of the 90% cap for before-2027 contracts now trades near 29%, while repeal before-September-2026 contracts sit at 24%. Combined volume exceeds $3 million as new bettors are counting on Dana White’s advocacy and close personal friendship with Donald Trump to accelerate possible legislative action.
Watch this House Ways and Means Committee hearing where lawmakers vow to reverse the gambling tax deduction change passed in Trump’s bill:
Implications for UFC, Sports Betting Integrity, and Fan Engagement
White stressed the importance of legal sports betting for the MMA sports sector. Legal betting boosts UFC fight-night excitement, broadcast valuations, and brand sponsorships. In contrast, he believes the deduction cap reduces wagering enthusiasm, weakens transparency, and harms the integrity of sport. Not all of these claims are well supported in White’s single-page letter, but there’s no doubt Dana White understands his industry well and carries tremendous weight with the U.S. President.
“Restoring the 100 percent gambling loss deduction remains a top priority for the AGA [American Gaming Association], and we continue to actively engage with Congress and the administration to support a legislative solution. We appreciate Dana White helping raise awareness about the negative impacts this issue has not only on bettors, but also on businesses and jobs connected to the legal gaming ecosystem.” — Chris Cylke, American Gaming Association
Bipartisan bills like the FAIR BET Act aim to restore the full 100% deduction but face hurdles in committee. White’s letter injects fresh momentum into these efforts, raising the likelihood of upcoming legislation. White reminded Trump of their shared commitment to American enterprise and fair rules for market participants.
