Morning Brew Daily - New Tax Bill Rocks Gambling Industry & ‘Superman’ Soars at the Box Office

Episode Date: July 14, 2025

Episode 625: Neal and Toby dive into why professional gamblers are outraged over Trump’s tax bill threatening their livelihood. Plus, an announcement of new tariffs on the EU and Mexico has the markets unsure if Trump is following through or not. Then, the reboot of ‘Superman’ is another notch in a movie hot-streak for Warner Bros. Meanwhile, Bad Bunny is singlehandedly boosting Puerto Rico’s economy. Also, while automakers try to install the latest and greatest tech in cars, cupholders have been the key decision factor for carbuyers. Finally, a preview of the week ahead.  Meet your local home loan expert at ⁠⁠https://mortgagematchup.com/?utm_source=morning_brew&utm_medium=podcast  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ 00:00 - Bastille Day 03:10 - Taxes on Gambling 8:10 - Tariff Latest 11:30 - Bad Bunny in Puerto Rico 17:00 - Superman Soars 20:40 - People Love Cupholders 24:30 - Week Ahead Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Neil Freiman. And I'm Toby Howell. Today, the one thing that car companies can't seem to get right. Then the only thing scarier for gamblers than splitting tens and watching the dealer get blackjack is a mysterious new tax law. It's Monday, July 14th.

Let's ride. It's July 14th, and you know what that means, Bastille Day. France is celebrating its biggest holiday today. commemorating when Parisians stormed the Bastille fortress in prison in 1789, an event that catalyzed the French Revolution. Every year, Paris throws a massive military parade, and pretty much every town across the country sets off fireworks. There are also plenty of celebrations here in the United States. Your local French bistro or cafe will probably have some sort of special going on, and if they're giving out croissants, I would get there early because Toby is going to clean them out.

Oh, you know, I am treating myself today. But actually, I am more of a pawn-a-chac-a-cholot guy, which is, in fact, not a croissant because it isn't crescent-shaped. A little croissant fact for you there. But my criteria for what makes a delicious croissant is very simple. It just has to be warm. Seriously, give me the best croissant in the world and give me the worst one ever made.

As long as they are both fresh out of the oven, I am a happy camper. Yes, light and fluffy is great, but give me warm or give me death. And now a word from our sponsor, mortgage matchup. Neil, what did you get into over the weekend? Sobe, I meal prep trying to save a little cash where I can. Oh, and did you make a little extra for your favorite podcast co-host? No extra chicken bowls for you, my friend.

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of a razor-thin margins. Those margins just got even smaller, though, thanks to a Provision tucked away in Trump's big tax and spending bill that changes the way poker players, sports betters, and professional gamblers get taxed. Starting next year, only 90% of losses will be deductible, which means that even if a gambler wins $100,000 and loses $100,000. in a year, they will still somehow owe taxes. It's like going to work all year making zero dollars than having the IRS knock on your door

and say, hey, give me some of that cash that you don't even have. Even worse, the losses compound as you gamble more and more. Say you're a poker player who wins a million bucks on the year, but those tournament buy-ins added up and you ended up losing a million bucks too. In the past, you pay zero taxes on that because you had zero earnings. But now, since you can only deduct 90% of your losses, you are paying taxes on a hundred thousand dollars of essentially phantom income. It makes it impossible to gamble for a living, Phil Galfond, a professional poker player said on X. Adding to gambler's frustration is that this

provision really came out of nowhere, even for some Republican lawmakers who were surprised to learn of the provisans' existence at all. It is supposed to raise about $1.1 billion in tax revenue over the next eight years, but the gambling industry says that revenue pales in comparison to what the $72 billion casino industry could stand to lose if their most lucrative customers go extinct. If it stays, there goes your professional Baccarat career, Neil. And it was just getting started. No, this definitely is a massive issue for professional gamblers who spend so, wager so much money and they operate on very thin margins. They are wagering hundreds of thousands of dollars each year with the hopes that they'll just win about 55% of

the time. And that is enough to make a living under the previous. tax regime, but these professional poker players, you might be wondering, okay, well, they're being taxed. Why do I care about them? I'm not a professional poker player. But they lubricate the entire industry. They're known as sharps. They're thought to account for 25 to 50 percent of all the money wagered legally on sports, and they, in a sense, lubricate the entire industry, and which leads to so much spending downstream at casinos and hotels and food service, and they are the one's really driving the industry. So if they say that we are not going to be spending anymore in the legal market,

we might be pushed to illegal markets or polymarket or other prediction markets because of this tax per provision, then it could have billions of dollars in economic consequences down the line. Yeah, the winners here are certainly those prediction markets who do get to skirt around that definition. And then also just offshore illegal black market betting sites who will probably take a lot more of that revenue because. you just don't want to have to report your taxes to the IRS, which is probably already happening

for sure. And then also another winner is just like CPAs who have said that they have just fielded hundreds and hundreds of panic calls from their gambling customers saying that it's just been a week of absolute chaos trying to figure out what to do here. Very much sports betters are not happy with this because they typically have actually the narrowest margins of any of that kind of professional gambling class. So they are certainly had a nasty, surprise seeing this as well. A lot of people from the industry is like, did they even think this through? It was probably put in by some congressional aid because a lot of top, you know, lawmakers said,

we don't even know where this came from. It just so happened to find its way into the final bill that's over, it's 900 pages long. So sometimes stuff like this happens, but they're saying that it could just completely kneecap a very large gambling industry centered around Las Vegas. And so there is a push to get rid of this because if the top people involved the Republican senators on the Senate finance committee say we didn't know this existed. And one of them said it was, quote, bad policy. There might be a way to claw it back last week.

A couple of Nevada Democrats in the House introduced a bill called the Fair Accounting for Income realized from betting earnings taxation act, the Fair Bet Act. That would restore that 100% deduction for gambling losses. So that even if you lose a little bit of money or you break even, you don't owe money on your taxes as in the previous regime. It was funny. I follow a lot of professional poker players on Twitter as well. And of course, they're all just like posting long threads, long videos about this as well. But a lot of them did say, you know what?

It's actually going to get rid of probably 75% of losing players. And the rich are only going to get richer because only the top, you know, percent, 1% can survive this. So some of them are saying, all right, fine. Like, let's get rid of all the waste. Like I'm probably still going to survive here. So survival of the fittest for sure, especially if you're on poker Twitter. I'm sure a lot of our listeners definitely are. It is an interesting lesson in the fact how small provisions thrown into bills at the last minute

can blow up entire industries that lawmakers don't even read. It's a critical week for trade negotiations after President Trump launched more tariff threats against the U.S.'s major trading partners on Saturday, ensuring that summer drama won't end with the finale of Love Island. On Saturday, Trump announced 30% tariffs on Mexico, saying it wasn't doing enough to stop the flow of fentanyl across the border and the European Union, effective August 1st. It capped off a week in which the U.S. sent letters to nearly two dozen countries, including allies Japan and South Korea, warning of higher tariffs in line with Liberation

Day taxes that will go into effect at the start of August. Trump also said he's going to hit Brazil with 50% tariffs, despite the U.S. having a trade surplus with that country because of a court case against one of his allies there. Oh, and I almost forgot there's a new 50% tariff on copper and 35% tariff. on Canada. If you're wondering, is this actually going to happen? That is a worthy question, given the many tariff delays and rollbacks this year. In his letters to countries, Trump did seem to leave wiggle room for negotiations ahead of August 1st, so you can bet that there's going to be frantic negotiations taking place over the next few weeks. At least one group of people

don't believe Trump will follow through. Wall Street traders. Despite the trade war coming roaring back, the S&P 500 hit an all-time high last week. Volatility is down. And all the major or banks upgraded their stock outlook for the year. Some analysts, though, say the market has gotten complacent and could get whacked like it did in April should these high tariffs go into effect, which would upend supply chains. Yeah, it's not just analysts too. I mean, J.P. Morgan CEO, Jamie Diamond specifically warned of complacency in the market last week. And on Thursday, he said that markets have become a little desensitized to these things because, you know, the taco trade of Trump always chickens out taco has become like the de facto drumbeat of Wall Street at

this point saying that we do think that most of these, even though they're threatened, will be delayed or postponed or won't come in as hefty as potentially those letters made them look. That being said, though, there are a lot of risk because, one, we are collecting more and more tariffs. The tariff rate is elevated right now. We are entering earnings season right now, which could show that maybe the tariffs are having a bigger impact on companies' bottoms lines than you're expected. And also, the stock market is a little overvalued now compared to its historic norm. So all of these factors are coming together that even though the market does just seem like it's basically just ignoring what's going on, we're rocking a tight wire rope right now, a high wire

because of all these risks that are kind of hitting the market from multiple sides. And you talked about tariff collections. We got new data from them on Friday. For the first time ever, they topped $100 billion for during a fiscal year to the amount of revenue that the U.S. collecting from tariffs, and it led to a surprise $27 billion budget surplus for the month. Tariff revenue is now the fourth largest source of revenue for the federal government. As a share of federal revenue, they were about 2% historically. Now they've more than doubled to around 5%. That could embolden Trump because one of the main goals of tariffs is to bring in revenue,

and it looks like new data show that, you know, there's a ton of new money coming in because of tariffs. All right, let's head to our winners of the weekend, the segment where Toby and I picked two things that tore up the wedding dance floor. I won the pre-show bagget baking competition in honor of Bastille Day, so I get to go first. And my winner is Puerto Rico, because the island is about to get a bad bunny-sized bump to its economy. On Friday, the music megastar began an unprecedented 30 concert residency in San Juan, bringing an era's tour level economic impact to a single place. The Tourism Promotion Agency Discover Puerto Rico says that 600,000 people are expected to come to the island for Bad Bunny's residency, double the average for those typically slower summer months. The run is expected to inject $181 million into the local economy, which led to Moody's upgrading its economic forecast for Puerto Rico and keep its GDP from flatlining this year, all because of Bad Bunny.

Tourism jobs are also forecasted to grow about 3% and stay at a higher level even after the residency is over. Now, it's important to remember that what Bad Bunny is doing is unusual. Typically, when an artist has a residency in a single city, it is Las Vegas. That Bad Bunny is doing it in his native Puerto Rico is a reflection of why such a legend there. His lyrics often discuss political and economic themes that resonate with people's daily lives, such as calling out corruption among the Puerto Rican governing class and criticizing frequent power failures on the island. Toby, here's another instance of a concert series delivering a measurable economic boost, but this one's different because it's concentrated in one place.

Yeah, long-time listeners of the show know that we talked about the heirs to her add gnauzum as it kind of just rolled through the entire world bringing these economic hotspots to wherever Taylor Swift kind of put down. The Harvard Business Review actually estimated that her heirs do report in $10 billion to local economies across several contents. Now imagine that all concentrated on one place, that place being Puerto Rico. Another cool thing that Bad Bunny is doing too is that this is a 30 concert stretch that he's staying in Puerto Rico. The first nine shows are open only to Puerto Rican residents as well.

So talk about just an economic boom. Talk about focusing on the people who got you to where you are. That is why he is so popular. And that is why this is so unprecedented is that it is so concentrated in one place for one of people. I mean, his rise has been absolutely stratospheric to watch between 2020 and 2022. Bad Bunny was the most played artist on Spotify, the first musician ever to claim the top spot for three consecutive years. In 2018, people streamed his songs 2.5 billion times. Six years later by 2024, it was up to 11.5 billion. It seems like you can't go anywhere to any party

without someone bringing up Bad Bunny or playing his music because he is just such a superstar at this point. He's been on SNL. He's gotten his face out. And the fact that he's just coming home to Puerto Rico before. He is going on a world tour, but he's doing this 30-day residency in Puerto Rico, showing love to his native island, and then he'll go off on his way. Up next, we have my winner of the weekend. My winner of the weekend is a bird. Wait, no, it's a plane. Oh, it's Superman, because the latest comic book movie installment got off to a flying start this weekend, raking in $122 million at the domestic box office. That makes it the best-performing solo Superman movie ever over its first weekend, edging out Superman Man of Steel, which made $116 million

back on its debut back in 2013. While Warner Bros. is plenty happy to see Superman resonating at the box office, CEO David Zoslav is especially relieved because this movie also serves as a launch pad for the DC Cinematic Universe after a stop start last decade, where it tried and failed to keep up with its Marvel counterpart. James Gunn, who used to direct Marvel movies before jumping ship to DC, was at the helm of Superman, and is also the co-lead of the DC Studio, where he's helped develop a 10-year plan for expanding that universe. While Gunn has his eyes set on the future, the president is also going pretty well for Warner Bros. all of a sudden.

Superman is currently sitting at number one in the box office, making it the studio's fifth number one movie in a row, following the debuts of a Minecraft movie, Sinners, Final Destination Bloodlines, and F1, the movie. That is a super streak, Neil. Lots of milestones with this opening. First comic book movie in a year to cross $100 million in its premiere. The one last year was Deadpool and Wolverine, first DC titled across $100 million in eight years since Wonder Woman. And it's only the third movie of the entire year of 2025 to cross $100 million.

The other being Warner Brothers Minecraft movie and Disney's Lilo and Stitch. So a great start for a franchise that needed a. desperate reboot after, and I'm going to read these movies and you're going to cringe, the Flash Aquaman and the Lost Kingdom, Shazam, Fury of the Gods, and Blue Beetle, just some epic flops there. They brought in James Gunn, who did Guardians of the Galaxy, and they said, dude, you did a really good job with that. Please do that for DC. We are desperate here. And overall, comic book movies have been in a slump. Even Marvel is not doing that well. So to see a comic book movie, superhero movie, based on Superman, do this one.

at the box office. A lot of movie execs are breathing a sigh of relief. And a lot of movie execs are looking at Warner Bros. and going, where did this come from? Because Warner Bros. was struggling so badly. They were languishing in last place of all the major Hollywood studios of their domestic box office share last year. Suddenly, they are going toe to toe with Disney after this run of five movies in a row that just kept having hits. They just keep all hits, no misses right there. They went from zero to 105 seconds. That's what an industry. History Insider told the New York Times. So just a very interesting turnaround for a much maligned studio under David's Laslav,

who, you know, has been a very hated CEO in his tenure because he's... HBO Max. Yeah, HBO Max. Max. He's been doing all this stuff. But suddenly, they've kind of stumbled into all this success. And it looks like D.C. is set up over the next decade. If they can keep this momentum going undergun to be basically maybe the MCU of the next 10 years

or so, which is just wild to think about if you go back to some of the movies that they have been cringing out, which have not been good. I think it's right there for the taking with the MCU languishing a little bit. Yeah, absolutely. I mean, they still have a long way to go. Marvel Cinematic Universe has brought in $32 billion at the box office. So maybe they get past one weekend of their first good movie in years, but you are right. They are, audiences are loving it.

Critics are loving Superman. And it's just a good start for a franchise that hasn't been in good hands over the last decade. When it comes time to buy a new car, the stuff you touch a lot. a.k.a. touchpoints are a lot more important than you'd think. Rather than horsepower or fuel efficiency, basic things like how the door handle feels or does the trunk make a nice thud when it closes, end up swaying buyers. And increasingly a single touchpoint is making or breaking car purchases, cup holders. According to JD Powers' initial quality survey, where they talk to new car buyers about what they are liking and not liking about their new rides, the biggest jump in complaints

this year was tied to cup holders. When looking at the top 10 problems for the industry, cup holders went from being the seventh most problematic issue for the vehicle to the third most reported this year, JD Powers Director of Auto Benchmarking told the drive. That is a massive jumps in complaints, mostly tied to one thing. Size. While it seems like manufacturers had cup holders figured out, the report says,

manufacturers are struggling to keep up with being able to accommodate all the different shapes in sizes of control. containers that are increasingly available. In other words, your Stanleys and Yetis are so freaking big now that carmakers are at a loss on how to accommodate the big liquid rigs you all are hauling around during your morning commutes. It's a bit of an engineering nightmare. How are you supposed to accommodate a sippy cup and a big gulp, a tall latte from Starbucks,

and a Stanley Cup? And what if you have multiple cup-loving passengers? Where are their liquids supposed to go? Neil, a shocking amount of people are unhappy. with their cup holders. Well, I'll tell you where they're supposed to go. Just look at Subaru and their Ascent SUV. This is the goat cup and bottle holder of all the automakers,

automaking models. It has 19 cup and bottle holders all throughout the car. That's nearly three for every human it can carry. It's just a sign that our cars have become essentially living rooms on wheels. And we need to bring everything in our house into the car. We use it as a third closet. if we use it as a place to put our cups, they are becoming, you know, de facto part of the home for people. And car buyers need to respond to this. This is not a new problem.

20 years ago, Pricewater Waters House Cooper's issued a report saying that the number of cup holders in a vehicle was one of the most critical factors in clinching that purchase decision. You mentioned those touchpoints where people are interacting with cars in a tactile manner. If they don't like, if they look at the cup holders and they say, well, that's too small. then it's a no-go for me. It's so fascinating that over the past couple of years, automakers have put so much emphasis on adding technology to their cars, you know, the touch screens that people have complained about. That has been the most important thing, injecting it with all these digital do-hickery.

And that is not what customers actually care about because the stuff that they touch, you know, those tactile things are what they care about. And cup holders, if you are frustrated with putting your Stanley mug in the center console every single day, you probably will never buy that car again because you've just had such a negative experience day after day with these dang cup holders. And I would just love to see fly on the wall of these engineering meetings. They're looking at these receptacles and going, how do we fit these in?

What technology can we use that make sure an espresso cup stays securely grasped in the same holder as a big gulp, something like that? So the answer is actually these spring-loaded tabs that kind of adjust varying to diameters, but just bigger ones of those, more cup holders. These are all these trends that these automakers are trying to figure out. And just imagine when self-driving cars get mass adopted, how much cup holders and other aspects of the living room is going to be

to have to infused in cars and we don't even need to drive and we're just going to hang out more in cars. Lots to think about. Okay, it's Monday. So here are the major events you need to know about in the week ahead. Welcome to Crypto Week, when Congress is going to be. debating a bunch of legislation aimed at regulating cryptocurrencies with an eye on supercharging growth. The signature bill that the House will take up is the Genius Act, which would create

federal rules for stable coins that has retailers and banks foaming at the mouth. And same with investors. The prospect of establishing clear guardrails around the sector has sent Bitcoin soaring to multiple record highs in recent days. And currently, the token sits at above $120,000. Toby, this feels like crypto's coming out party. All you have to do is go back to the Biden administration when Coinbase said, hey, can we get some rulemaking here? We just want to know what we're supposed to do. Congress just tell us what to do. And the Biden administration turned around and sued them instead.

So now we have an entire crypto week where Republican lawmakers are very keen on passing multiple bills related to crypto, falling through on the president's promise to make, you know, the United States of crypto capital of the world. So just the juxtaposition between the previous administration and the current administration, has to be a big, you know, celebration for the crypto industry. And for President Trump, who himself is involved with many crypto ventures that critics say sets a bad precedent and is a conflict of interest. If you missed hearing the most epic jargon-filled CEO's been imaginable, you're in luck. Earning season is back.

All the major American banks such as J.P. Morgan, Goldman Sachs, and City will report this week, and Netflix will drop its Q2 financials on Thursday. The good news for companies is that the bar is set very low. Analysts expect second quarter profits in the S&P 500 to rise just 2.5% year over year, which would be the weakest growth since mid-20203, but it'll still be a test for a ripping stock market that's managed to brush off the trade war relaunch. I mean, this ties back to our top or our second story today is that investors are really just wanting to see what corporate leaders have to say about what's going on. How are consumers reacting? How are they reacting to a higher tariff? environment. Is economic growth ahead or our corporate profits going to falter a little bit?

So even beyond some of the government data that we are going to get, corporate profits are just a great canary in the coal mine of how the economy is actually doing. And then finally, in sports, the summer lull has officially arrived, which means it's time to watch beefy dudes hit dingers. Major League Baseball's home run derby is tonight, followed by the All-Star Game on Tuesday. The WMBA is also hosting its All-Star game this weekend. in Indianapolis, the home of Caitlin Clark. Finally, golf's Open Championship, better known as the British Open

begins on Thursday at Royal Portrish in Northern Ireland. Toby, it is dry out there. I was trying to find something to watch on TV last night. Cricket was the only thing I could find, so watch a little cricket. Don't sleep on the Tour de France, though, either. First mountain stage today,

14,000 feet of climbing in just 102 miles. One of the favorites lost his best teammate, climber to a rib industry. So there's a lot of drama on the tour right now. So I refuse to say that this is a dry period right now. If you're watching the home run derby tonight and need somebody to root for or want to know a single storyline. Well, look at this guy, Cal Raleigh.

He's a catcher for the Seattle Mariners. His nickname is the big dumper. I'm not going to elaborate on that. You can do some research yourself. But he is having a ridiculous first half of the season. He's hit 38 home runs already, which leaves. leads him just one short of Barry Bonds' record of 39 home runs in the first half of the season in 2011. So the big dumper has taken some big swings.

All right, that is all the time we have. Thanks so much for starting your morning with us. Have a wonderful start to the week. If you have any thoughts on today's episode, send an email with questions, comments, or feedback to Morning Brew Daily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer. Our associate producers are Olivia Graham and Olivia Lake.

Hair and makeup is desperately looking for bad bunny tickets. Devin Emery is our president and our show is a production of Morning Brew. Great. So, Danielle, let's run it back tomorrow.