Congressional backers of a bill to restore a 100% gambling loss tax deduction are continuing to push for the legislation despite persistent political roadblocks and a looming deadline.
- Lawmakers push to restore the 100% gambling loss tax deduction, rolling back the 90% cap set by the One Big Beautiful Bill earlier this year.
- The FAIR BET Act has bipartisan support, with sponsors in both the House and Senate, but faces gridlock and GOP divisions.
- The change is set to take effect Jan. 1, 2026, giving Congress only a few months to act, with high-volume gamblers most affected by the change.
Members of both House and Senate supporting the bill have continued drumming support in Congress and in public for legislation that would allow gamblers who itemize their taxes to write off 100% of their losses, instead of the 90% level introduced in the One Big Beautiful Bill (OBBB) passed earlier this year. Though the measure has bicameral - and bipartisan - support, the legislation still faces a difficult road to passage.
Gambling tax background
Gamblers who itemize their taxes could previously deduct all their losses against their wins, meaning a hypothetical gambler who reported $100,000 in wins and $100,000 in losses would not have to pay taxes on their winnings. The OBBB reduced the limit to 90%, meaning in the same scenario bettors would have to pay taxes on $10,000, even though they didn’t gain any income.
This “phantom” tax has angered members of both parties since its late inclusion in discussions around the OBBB, a sweeping proposal that changed tax codes and altered government spending, among a host of other provisions. Republican Rep. Jason Smith, chair of the powerful House Ways and Means Committee, said during a public event he supported the 100% restoration bill championed by Democratic Rep. Dina Titus.
But even a Republican committee chair vote may have limited influence to pass the bill through both chambers.
The GOP passed the sweeping bill without a single Democratic vote in either chamber. Republican law writers also inserted the gambling tax deduction change; it will take majority GOP support in both the House and Senate to change it back.
Though a growing number of Republican House members and senators have voiced their support for the 100% level, some GOP members appear content with the reduction. Opponents to the 100% level argue that gamblers should pay what amounts to higher taxes, even though Republicans have touted the overall OBBB as a massive tax cut.
Entrenched political gridlock may be a larger issue.
Congress has become increasingly polarized in President Donald Trump’s second term, a reality further complicated by Republicans narrow membership advantages in both chambers. This has required essentially unanimous Republican support for most key legislation, further marginalizing Democrats.
This has led some Democrats to support a government shutdown when the federal fiscal year concludes at the end of September. With all nonessential government offices halted, a comparatively minor issue such as a gambling tax loss becomes an even smaller priority.
The change is set to take effect beginning with the Jan. 1, 2026 tax year, leaving just over three months for Congress to act. Although only around 10% of tax filers itemize deductions, and even fewer report gambling wins, stakeholders fear that the impact on high-volume gamblers could have significant trickle-down effects on the industry overall.
Efforts continue
This hasn’t stopped Titus, the rest of the Nevada congressional delegation, and a growing number of congressional members from pushing for the 100% deduction restoration.
Titus tried to include her bill’s language as part of a critical defense spending bill. When it was not included earlier this month, she said she would continue pushing for the standalone bill.
Her proposal, the FAIR BET Act, now has 13 cosponsors, including members of both parties. It still awaits further action in the Ways and Means Committee before it could pass on to the full House floor.
I’m back in DC which means the fight for the FAIR BET Act continues. Thank you @RepSalinas and @RepGregStanton for signing on. We are one step closer to getting this fixed.
— Dina Titus (@repdinatitus) September 10, 2025
Meanwhile, Nevada Sen. Catherine Cortez-Masto has led the Senate push for a companion bill. An attempt to pass the bill out of the Senate by unanimous consent was rejected earlier this year, underscoring the political difficulties the bill still faces.
There is no timeline for further action before the de facto Jan. 1 deadline - and no guarantee any vote is taken before the bill takes effect.
