A Senator’s opposition to gambling tax loss deduction legislation could present another roadblock to the long-stalled proposal.
- An Oklahoma senator’s opposition threatens to stall bipartisan efforts to restore the 100% gambling loss tax deduction.
- The current 90% deduction taxes “phantom” income and could deter high-value gamblers from legal markets.
- Despite industry and congressional support, the bill faces procedural delays and resistance in the Senate.
Republican Oklahoma Sen. James Lankford told Punchbowl News earlier this week he is opposed to bipartisan legislation that would restore the 100% deduction of a gambler’s losses against their wins. Langford’s comments are one of the first from a senator expressing outright opposition to a proposal that has garnered backing from members of both chambers of Congress and both parties.
Oklahoma has more than 100 regulated gaming facilities, the most per capita of any state.
Law change's impact on gamblers
Starting this calendar year, gamblers who itemize their tax filings can only deduct 90% of their losses against their wins. A hypothetical gambler who reports $100,000 in wins and $100,000 in losses would have to pay tax on $10,000 of income they didn’t realize.
This was changed from 100% of losses against wins as part of the sweeping One Big Beautiful Bill signed into law in July of last year. The provision was not included in a House-passed version of the bill but was added late in the legislative process to a version agreed to by the Senate and ultimately accepted by the House.
Shortly after passage, House lawmakers led by Democratic Nevada Rep. Dina Titus introduced legislation that would restore the 100% deduction. Titus’ bill has since gained nearly two dozen cosponsors, including members of both parties.
New: The push to reverse the OBBB’s tax hike on gamblers has hit a snag
— Laura Weiss (@LauraEWeiss16) January 5, 2026
Sen. LANKFORD told us he’s opposed to restoring the 100% deduction for losses on bets
“It’s not an unrealistic change,” he said of OBBB. “It’s a pretty minor change in that tax policy.”
More in the Vault https://t.co/UfyvzR3h0D
Republican Rep. Andy Barr of Kentucky has also introduced nearly identical legislation. Titus and Barr have both cosponsored each other's bills, with hopes a Republican-led bill could gain more traction in the GOP-controlled House and Senate.
Critics of the 90% threshold, including Titus, Barr and many leading gaming industry stakeholders, have argued the bill taxes “phantom” income, unfairly punishing gamblers with a levy on money they didn't make. Though it only directly impacts a small fraction of tax filers who itemize gambling losses, industry stakeholders fear the deduction change could dissuade larger players with higher tax liabilities from the legal market.
Some analysts believe this could lead to billions of dollars in direct and indirect economic losses for casinos and sportsbooks.
Opposition remains
Despite the initial political support, Titus' bill has not gained traction in Congress.
Rep. Jason Smith, who chairs the legislative committee that has jurisdiction over both bills, has not scheduled either proposal for a vote despite indicating publicly he would support the legislation. Multiple efforts to attach the tax change to other legislation have also proved unsuccessful.
Assuming it passes a committee vote, the bill would still need to pass the full House of Representatives, a process that could take weeks. From there it would also need to pass the Senate, where legalization efforts have proved just as difficult.
A motion last year to unanimously approve the gambling tax deduction restoration was shot down. Sen. Lankford’s comments this week reaffirm opposition in the upper chamber, especially among some key Republicans whose votes will be needed to pass the bill.
Supporters in Congress and within the gambling industry have remained publicly optimistic that the “unfair” nature of the tax will draw support and final passage, but progress has not materialized six months after the deduction change was signed into law.
In the meantime, gamblers are facing significantly higher tax burdens, levies that could deter gambling and hurt the industry’s overall bottom line.
