US Sportsbooks Rethink VIP Perks as New Taxes Hit Bettors Hard

This summer, sports bettors in the U.S. are grappling with a double financial blow. First, Illinois passed a groundbreaking tax on betting handle — the total amount wagered — making it the first state to do so. Shortly after, federal lawmakers changed how much gambling loss a bettor can deduct from their taxes, cutting the limit from 100% of losses to just 90%.

For recreational and professional gamblers alike, the impact is significant. Some sportsbooks have already indicated that they’ll pass the added costs to customers. At the same time, upstart prediction markets like Kalshi — which face fewer taxes and looser rules — are attracting attention from high-stakes players seeking better value.

VIP Bettors: Small in Number, Big in Influence

Despite making up a tiny fraction of users, VIP bettors contribute an outsized share of sportsbook revenue. According to Eilers & Krejcik Gaming, this was evident when Fanatics briefly overtook DraftKings in New Jersey earlier this year — largely due to losses from a single high-value customer.

PointsBet’s data tells a similar story. Before its acquisition by Fanatics, the company earned 70% of its annual revenue from VIPs, who made up just 0.5% of the customer base. These bettors are often courted with perks like free bets, cash rebates, and exclusive offers.

But with new tax burdens, operators may need to do more. Analysts suggest new incentives, such as luxury experiences and exclusive events, could help retain these top-tier gamblers. Platforms like Kalshi are beginning to lure away some VIPs. These sites operate under different financial rules and use a model that resembles trading markets, allowing users to bet on outcomes like sports or elections.

One bettor, for instance, wagered $665,000 that golfer Collin Morikawa would not win the Masters. When Morikawa fell short, the user walked away with a $30,000 profit — with potentially better tax treatment than they’d receive through a traditional sportsbook. Industry experts note that because Kalshi-style platforms are structured as markets, rather than gambling houses, traders may enjoy more favorable tax handling.

A Shift in Strategy: Perks and Regulation

At a recent gaming industry summit in Louisville, executives discussed how to adapt. Chad Beynon of Macquarie Group shared that one sportsbook is exploring meet-and-greets with pro athletes as a new form of reward. “You can have dinner with someone on the Knicks like Josh Hart,” he said, pointing to a trend toward non-cash incentives.

However, the U.S. is keeping a close eye on how other countries are handling VIP treatment. In the UK, new laws enacted in 2020 slashed VIP membership by over 90% by enforcing affordability checks and tighter oversight. American lawmakers may follow suit. The updated SAFE Bet Act proposes similar guardrails, signaling that U.S. VIP programs could soon face more restrictions.

The broader tax environment for gamblers has also shifted. Under the new federal law — part of President Trump’s sweeping “One Big Beautiful Bill” — gamblers can now only write off 90% of their losses. Critics argue that this hits both professionals and casual bettors unfairly.

Poker pro Phil Galfond warned that the change could push pros out of the business entirely. “A pro who earns $200k a year might have $3 million in winnings and $2.8 million in losses,” he said. “This means earning $200k and being taxed as if they earned $480k.” In response, Nevada Congresswoman Dina Titus has introduced the Fair Bet Act, which would restore the full deduction for losses. Its future, however, remains uncertain.

High rollers made up just 0.5% of PointsBet’s customer base in 2019–2020, yet they accounted for nearly 70% of the company’s total revenue.

Conclusion

With rising taxes and increased competition from lightly regulated markets, U.S. sportsbooks may need to rethink how they attract and retain VIPs. As the legislative landscape evolves, so too will the perks, strategies, and risks tied to high-stakes sports betting. For now, the industry faces a balancing act between compliance, competition, and customer loyalty.