Nevada Congresswoman Dina Titus has renewed her push to restore the full tax deduction for gambling losses, targeting a provision that caps deductions at 90%. Now, she plans on adding it to a federal defense budget bill.
Key Takeaways
- Rep. Dina Titus is pressing Congress to restore the full 100% deduction for gambling losses.
- The FAIR BET Act is being introduced as an amendment to the 2026 NDAA to force consideration.
- Opposition to the new 90% cap on gambling loss deductions has come from both parties and the gaming industry.
Titus announced she is introducing her Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act as an amendment to the 2026 National Defense Authorization Act (NDAA). She argued that gamblers should not be taxed on money they never actually won.
The cap, set to take effect on Jan. 1, 2026, was included during final budget negotiations and has drawn criticism across party lines as well as from the gaming industry. Titus emphasized that tying her measure to the must-pass defense bill ensures it receives consideration when Congress reconvenes in September.
She contends the FAIR BET Act would restore basic fairness to the tax code. Lawmakers on both sides, including House Ways and Means Committee Chairman Jason Smith, have acknowledged that the deduction limit was poorly considered and are exploring ways to reverse it before implementation.
Expanded tax changes could impact professional gamblers
In addition to drawing criticism from lawmakers, the gambling provision introduced in President Trump’s One Big Beautiful Bill has caused backlash among gamblers. The provision, which now makes losses only partially deductible, carries serious implications for professional gamblers who often treat gambling as a business.
For professionals wagering on poker, casino games, or sports, the rule could significantly increase taxable income, even when they break even.
Critics argue this could distort betting strategies and limit where and how professionals choose to play. Professional poker player Phil Galfond recently warned the measure could "end professional gambling in the US" by forcing some players to pay taxes that exceed their actual net winnings.
Despite objections, Republicans and Democrats alike admit uncertainty over how the provision was inserted, while Nevada's delegation continues to push for its removal.
Industry voices raise concerns over tax change
The gaming industry has also voiced concern, with DraftKings CEO Jason Robins questioning the logic of the deduction cap in a CNBC interview. He said it made little sense for gamblers to pay tax on losses and described the move as a likely budgetary technicality.
“I do think it’s something that doesn’t makes sense,” he said. “If you can’t deduct all your losses, you know, how does that make sense that you pay income tax on something that’s not actually income.”
Robins added that the change was possibly brought on by a technicality to the Byrd rule and noted some “appetite” exists in Congress to revisit the change, and that DraftKings is engaged with lawmakers on the matter.
