The Indicator from Planet Money

Episode•July 11, 2025•9 min

Red tape indicators: sports betting, R&D and click-to-cancel

We are back with Indicators of the Week! Today, we'll be digging into why U.S. professional gamblers are worried about their future, why businesses might start investing more in research and development, and why cancelling your subscriptions is going to remain difficult. Related episodes: How sports gambling blew up (Apple (https://podcasts.apple.com/us/podcast/planet-money/id290783428?i=1000680755648) / Spotify (https://open.spotify.com/episode/51RxhTAW58sRYRCoZaJj8g?si=73c091a0c80e42df)) The cautionary tale of a recovering day trading addict (Apple (https://podcasts.apple.com/us/podcast/the-indicator-from-planet-money/id1320118593?i=1000686210451) / Spotify (https://open.spotify.com/episode/5mH331cqbEpencgyA5XKKM?si=d0dfa0290e8e4078)) The 'Planet Money' team examines the subscription trap (https://www.npr.org/2024/10/25/nx-s1-5164465/the-planet-money-team-examines-the-subscription-trap) For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org (http://plus.npr.org/). Fact-checking by Sierra Juarez (https://www.npr.org/people/g-s1-26724/sierra-juarez). Music by Drop Electric (https://dropelectric.bandcamp.com/). Find us: TikTok (https://www.tiktok.com/@planetmoney), Instagram (https://www.instagram.com/planetmoney/), Facebook (https://www.facebook.com/planetmoney), Newsletter (https://www.npr.org/newsletter/money). To manage podcast ad preferences, review the links below: See pcm.adswizz.com (https://pcm.adswizz.com) for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. Learn more about sponsor message choices: podcastchoices.com/adchoices (https://podcastchoices.com/adchoices) NPR Privacy Policy (https://www.npr.org/about-npr/179878450/privacy-policy)

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Transcript

0:00

Npr.

0:12

This is the Indicator from Planet Money. I'm Adrienne Ma.

0:14

And I'm Waylon Wong. Joining us today is

0:20

Waylon. What is that sound?

0:22

I don't know. It sounds like something or someone crashing through the underbrush. Is that just Jeff Guo of Planet Money?

0:29

Guys, it's not me. I'm pretty sure it's the tempestuous beast known as Indicators of the Week.

0:41

Oh, phew. Sorry for the case of mistaken identity, Jeff.

0:47

Don't worry about it. Happens all the time. On this episode of Indicators of the Week, we are taking on one of the most unstoppable forces in the economy. It's got a huge footprint. I'm talking about the government, the apex

1:00

predator of the economy. For some people, perhaps. So today we'll be digging into why professional gamblers are worried about extinction, why businesses might start investing more in research and development like cloning dinosaurs, and why it may stay difficult to cancel your subscriptions. Hold onto your butts after the break. My indicator is 90%. This refers to the percentage of gambling losses that people are able to deduct.

1:30

Yeah. This is news you can use. There is a tax deduction for the money you lose when you're gambling.

1:36

Yes. And you used to be able to deduct 100% of your losses against what you gained.

1:42

So essentially, Uncle Sam, aka the taxpayers, had. Have been supplementing their risk with 100% deduction.

1:50

Right. But that deduction got lowered to 90% under the big tax and spending bill that President Trump just signed. And this change in the tax code is causing quite a stir in the gambling world, especially among professionals.

2:02

I am not an experienced gambler myself, but I guess I don't really understand what the big deal is here.

2:10

Yes. But here's a hypothetical that kind of lays out what people are getting upset about. Okay, so let's say you won $100,000 in a. And that same year you also lost $100,000.

2:22

Right. So you netted zero.

2:24

Exactly. Under the old tax code, you could deduct all of your losses, $100,000. So you would net out at zero taxable gambling income. Now, with this change in the law, you can only deduct 90% of your losses. So that's $90,000. Deduct those $90,000 from your winnings of 100k. And. And that leaves you with $10,000. You will now be taxed on those $10,000.

2:52

Okay, but that's. Even though I didn't make any money gambling for the year.

2:57

Yeah. So gamblers say it's like you're being taxed on money that you didn't take home. You can see why this is making waves in that community. One professional poker player said on social media that, quote, you can't be a professional gambler in the US if this goes through.

3:12

And I imagine this is affecting a lot of people, Right, because gambling and sports betting have become such big things in the US over the past couple years.

3:19

Yeah, there is definitely pushback. And one Democratic congresswoman from Nevada has already introduced a bill that will restore the old deduction of 100%. She said if the lower deduction stays in place, gamblers will end up using unregulated platforms or they'll just stop reporting their winnings.

3:38

Thank you very much. But first, I just gotta go call my bookie.

3:41

You're like, I have a crisis.

3:44

Actually, my indicator is also tax related. It is 174, as in section 174 of the US tax code.

3:55

Ooh, throwing those sights at us.

3:57

See what I did there? Bending the indicator of the week rules a little bit. But this has to do with the one big, beautiful bill act President Trump signed into law on July 4th. And as we parse out the different facets of this bill, one relatively obscure one that caught my eye this week, that I'd argue is actually pretty important, has to do with section 174 of the tax code. So this is a tax law that goes back decades. And what it does is allow companies to fully deduct research and development costs they incur in a given year. So, hypothetically, if you are a company that makes cat toys, let's say I'm looking at you, Jeff.

4:35

Ooh, yeah.

4:36

And let's say you spend 1,000 bucks developing these cat toys. You know, you make prototypes, you pay wranglers to bring in all the cats to test them.

4:44

You convene the focus groups of cats,

4:46

you pay the cats, of course, and

4:48

you rack up 1000 bucks in research expenses, you could deduct that thousand bucks from your taxable income that year. But this law was changed during the first Trump administration, when Republicans passed the Tax Cuts and Jobs Act. Basically, when they were trying to get it through, they're figuring out how can they pay for the bill. And they said starting in 2022, companies could no longer immediately deduct all their R and D expenditures in a given year.

5:15

I'm sure they were not thrilled with that.

5:17

And instead, they would have to amortize or spread them out over several years. And so that means that a company that used to deduct 100% of their research costs upfront each year, could now only deduct like, 20% of it.

5:32

And this was like, a huge deal, right? Like, it made the cost of research and development for companies just a lot more than it used to be.

5:40

Yes. A lot of people in sectors like the tech industry kind of freaked out about it, and some have suggested that is one of the reasons the tech industry has laid off so many people in the past couple years. So what you have is, like, a pretty negative impact on some businesses, which is probably why Republicans this time around, with the big beautiful bill, decided to restore the rule that allowed full deductions.

6:04

So it went from like, 20% each year back to 100%.

6:09

Yes.

6:09

The tax code giveth and the tax code taketh away. That was the lesson of my indicator. It's also the lesson of your indicator, Adrian.

6:17

That is correct. Jeff. What's your indicator of the week?

6:21

All right, so my indicator of the week has to do with something else having to do with the government that we've talked about on the show. It's called the click to cancel rule. It was this new regulation from the Federal Trade Commission that was supposed to make it easier to cancel your subscription services.

6:37

I remember this. Yep.

6:39

Right.

6:39

So if you were able just to sign up for something really easily by like, clicking something on a website, they wanted to make it just as easy to cancel that thing. Like, you don't have to call someone on the phone or whatever.

6:49

So this was a pretty big deal. And this new regulation, it was supposed to take effect next Monday. However, just this week, a federal court struck down the rule. So as of now, click to cancel is no more. It's gone.

7:03

Oh, we were so close.

7:05

Just like that.

7:06

Yeah.

7:07

So what was the rationale?

7:09

Yeah. Okay. So the funny thing is, the court didn't have a problem with the regulation itself. The court had a problem with how the FTC created the regulation.

7:18

Oh, so that's like a procedural thing?

7:20

Yeah. They didn't follow the right rules to make this rule.

7:24

Oh, no.

7:24

So I know. So when government agencies make new regulations, Right. There's usually this whole choreography. You have to publish a draft of the regulation. You have to collect public feedback. Sometimes you hold public hearings. And for this regulation specifically, one of the rules was that the FTC was supposed to publish a report looking at the costs and benefits of the rule and analyzing possible alternatives. In fact, they were supposed to publish two versions of that report, A preliminary analysis for the public to digest and comment on. And Then a final analysis and. But in this case, the problem is that the FTC only published the final report, not the draft.

8:03

Oh, my gosh. This is so, like, arcane.

8:07

Yeah.

8:07

Right.

8:08

So they were working on this for literally years.

8:11

Yes.

8:11

And then it all just went away because they didn't file a preliminary report.

8:15

Yes, exactly. I think that this whole saga, what it shows you is just how difficult it is sometimes for government agencies to make changes to regulations. There are just a lot of hoops they have to jump through. And, you know, that is intentional. Those rules are there to make sure that the public gets a say in what government agencies do.

8:34

I mean, that does make sense, right? Like having public comment and the opportunity to, like, digest information and say your piece.

8:41

Yeah.

8:41

Although it might be more efficient if they had, like a click to make a rule rule.

8:47

No, that's. That takes us down the road to tyranny, Adrian. But anyway, the ftc, they can bring back the click to cancel rule. They just have to follow all the rules this time.

8:59

Well, sounds like click to cancel is going the way of the dinosaurs.

9:03

Well, they could always bring it back, actually.

9:05

Just like in the Jurassic park series. They just keep bringing the dinosaurs back.

9:11

Just make sure you follow the rules this time.

9:13

They always do in the movies, right? Everything always goes so great.

9:16

This episode was produced by Cooper Katz McKim and engineered by Jimmy Keighley. It was fact checked by Sierra Juarez. Kagan Cannon is our editor and the indicators of production of NPR.

Red tape indicators: sports betting, R&D and click-to-cancel

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