New legislation known as the Full House Act has been introduced in Congress as a bipartisan attempt to reverse a change to federal gambling tax rules. Those rules could significantly affect professional poker players, casual gamblers, and Nevada's tourism-driven economy.
Key Takeaways
- The Full House Act seeks to restore the full deduction of gambling losses against winnings for tax purposes.
- Lawmakers warned the existing rule could result in gamblers owing federal taxes despite breaking even overall.
- Nevada officials said the policy risked discouraging major gambling events and related tourism activity.
The bill focuses on rolling back a provision included in the GOP’s “Big Beautiful Bill” that reduced how much gambling losses could be deducted against winnings, ending a long-standing tax framework that had been in place for decades.
The legislation was introduced by Nevada Rep. Steven Horsford and Ohio Rep. Max Miller, who described the measure as a fix for what they considered an unintended outcome of broader tax legislation. The bill's formal title, “Facilitating Useful Loss Limitations to Help Our Unique Service Economy,” reflects its focus on protecting industries reliant on discretionary spending, including gaming and hospitality.
Under the current rule, gamblers can only claim a deduction of 90% of their losses. This means that a person could be liable for a 10% tax on their winnings, regardless of whether their total winnings and losses offset to zero.
“Taxing people on money they never actually earned is fundamentally unfair and harmful to Nevada’s economy,” Horsford told KLAS. “This policy would drive tourism across our state elsewhere. There is strong bipartisan agreement that this provision was a mistake, and Congress must act to correct it.”
Another Nevada lawmaker, Representative Dina Titus, has also been fighting for gambling change on the Big Beautiful Bill by introducing her Fair Bet Act. Unfortunately, the bill failed to make progress after it stalled in Congress when the Rules Committee declined to advance it.
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Las Vegas tourism slump deepens
The renewed tax debate has emerged as Las Vegas faces broader economic challenges, with new data showing continued weakness in tourism during what is usually the city's busiest season. Visitor volume decreased 5.2% year-on-year in November, dropping to 3.1 million, according to the Las Vegas Convention and Visitors Authority.
There was also a significant decline in the number of passengers passing through the gates at Harry Reid International Airport. Data from the airport showed that the number of passengers in November was down 9.6% year-on-year to 4.3 million, which was sharper than the 8.2% decrease in October.
The downturn came despite the return of the Formula 1 Las Vegas Grand Prix, which had previously boosted tourism.
This time, the race coincided with the longest federal government shutdown in U.S. history. The stoppage reduced air traffic as shortages emerged among air traffic controllers unwilling to work without pay.
Tourism officials noted that Las Vegas' struggles began well before the shutdown.
Price increases due to inflation, together with the presence of trade tensions during the administration of President Donald Trump, were identified as factors that reduced expenditures on discretionary categories, including leisure travel.
On the other hand, stricter immigration laws and aggressive rhetoric towards foreign administrations reduced international tourism in the U.S.
