Effort to Restore Full Gambling Loss Deduction Stalls in House

WASHINGTON — Nevada Rep. Dina Titus vowed Tuesday to keep pressing her case after the House Rules Committee rejected her attempt to restore the full federal tax deduction for gambling losses.

Titus, a Democrat whose district includes the Las Vegas Strip, has been pushing the Fair Accounting for Income Realized from Betting Earnings Taxation Act (FAIR BET Act), which would remove a 90% cap on gambling loss deductions and reinstate the full 100% deduction gamblers were allowed before a Trump-era budget change. The Rules Committee, controlled by Republicans, denied her bid to add the measure as an amendment to the annual defense authorization bill, leaving the legislation stalled in the House Ways and Means Committee.

“Unfortunately, the GOP-controlled Rules Committee did not accept the FAIR BET Act as an amendment to the NDAA,” Titus wrote on social media after the vote. “This was an easy fix that should have been adopted. Nonetheless, I will continue to build support to restore the 100% gambling loss deduction.” Her office declined further comment.

A Longstanding Policy Fight

The deduction for gambling losses allows bettors to offset winnings when filing federal taxes. Under current law, taxpayers can deduct only 90% of their gambling losses, a change projected to generate $1.1 billion over eight years beginning in 2026.

The adjustment was added in the Senate Finance Committee during the Trump administration’s last budget process. Sen. Mike Crapo (R-Idaho), then chair of the committee, oversaw the measure, though some of his colleagues, including Republican Sens. Chuck Grassley of Iowa and John Cornyn of Texas, later said they were unaware it had been included.

Critics argue that the 90% cap can create tax liability even when a gambler’s winnings and losses balance out, effectively taxing activity that did not result in net income. Titus sought to strip the provision before the budget cleared the House, but the bill passed without amendments and was signed into law on July 4, with the gambling tax change scheduled to take effect in 2026.

Parallel Efforts in Congress

Titus is not the only lawmaker working to roll back the change. Rep. Andy Barr (R-Ky.) introduced the Winnings and Gains Expense Restoration Act (WAGER Act) in July, while Sen. Catherine Cortez Masto (D-Nev.) filed the Facilitating Unbiased Loss Limitations to Help Our Unique Service Economy Act (FULL HOUSE Act) in the Senate. None of the measures have advanced.

The debate reflects the broader role of gambling in states’ economies. Nevada, home to the largest casino industry in the U.S., has long argued that federal tax policy should not disadvantage legal gaming operators or their customers.

Alongside the FAIR BET Act, Titus has been pursuing repeal of the federal excise tax on sports betting, a levy she has opposed since 2014. The Discriminatory Gaming Tax Repeal Act of 2025, introduced earlier this year, would eliminate the 0.25% tax on all legal sports wagers, as well as a $50 per-head tax on sportsbook employees.

“The tax does nothing except penalize legal gaming operators for creating thousands of jobs,” Titus said in a statement, noting that illegal sportsbooks pay no such levy. She added that when she once asked the Internal Revenue Service where the revenue was tracked in the federal budget, “they didn’t even know.” The excise tax, established in 1951, predates the Supreme Court’s 2018 ruling that allowed states to legalize sports betting, which is now permitted in 38 states and Washington, D.C. Titus and other critics say repealing the tax would level the playing field between licensed operators and the black market.

This was an easy fix that should have been adopted. Nonetheless, I will continue to build support to restore the 100% gambling loss deduction.

Looking Ahead

While Titus’s amendment was blocked this week, the array of bills introduced across both chambers underscores the persistence of lawmakers seeking to ease federal tax burdens on gambling. With the 90% cap on loss deductions set to take effect in less than a year, the issue is likely to remain on Congress’s agenda — particularly for members representing gaming-dependent states.