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Gamblers Are Using Losing Lottery Tickets to Lower Tax Burden

Some gamblers are trying a new strategy to cut down on the tax increases included in the One Big Beautiful Bill. Now that players are only allowed to deduct 90% of their losses, they are trying to use other people’s losing lottery tickets to lower their tax bill.

Why Are Gamblers Buying Losing Lottery Tickets?

Professional gamblers are trying to use losing lottery tickets to lower their tax burden in 2026. US casino players created the strategy to avoid new tax laws.

The One Big Beautiful Bill reduced the amount of gambling losses that players could deduct from their income. Instead of deducting 100% of your losses, you can now only deduct 90%. For professional players, that 10% can be thousands, if not millions, of dollars.

A new strategy for avoiding a massive tax bill is to inflate your losses. To do this without actually losing, some players have turned to buying other people’s losing lottery tickets.

In theory, buying losing tickets would increase your losses and lower the amount of money you owe in taxes. Having bags full of losing tickets in your possession would provide a paper trail to prove your total losses.

However, the plan is far from foolproof and could land these opportunistic players in more hot water with the IRS.

How Are They Buying Them?

Sites like eBay and other online marketplaces have been key to this tax avoidance scheme. Gamblers can buy losing tickets in bulk at a major discount compared to buying new tickets.

It is a great plan for the people selling their losing tickets. Any money that they receive from their losing tickets is more than they would have gotten by simply throwing the tickets away.

Of course, not all marketplaces are keen on members selling losing tickets. Listings that specifically mention using tickets as a tax write-off are usually taken down. However, selling the losing tickets as collector’s items usually avoids scrutiny.

Should You Use Losing Lottery Tickets for a Tax Break?

No, you should not buy losing lottery tickets in hopes of earning a tax break.

If you buy new tickets and they lose, you should include them in your total gambling losses. However, buying other people’s losing tickets to inflate your own losses is tax fraud. Now that the cat is out of the bag about the practice, the IRS is sure to look more closely at gamblers’ tax filings.