The rush to fix the predicament that President Donald Trump’s “One Big Beautiful Bill Act” may put sports bettors and gamblers in starting next year has run into the reality of lawmaking in Washington, D.C.
- A tax change in Trump's "One Big Beautiful Bill Act" limits gamblers' ability to deduct wagering losses to 90% of winnings starting in 2026, potentially taxing them on money they didn’t actually keep.
- Nevada lawmakers have already introduced bills in Congress to reverse the change, but those efforts have already lost momentum.
- While the tax impact may mostly affect professional gamblers, experts warn it could push those higher-stakes players to offshore betting markets, potentially hurting the U.S. gambling industry.
Two pieces of legislation have already been introduced in the U.S. Congress to undo a concerning tax change inserted into the omnibus bill signed into law last week by Trump.
Starting in 2026, that change will further limit the amount of wagering losses gamblers can deduct from their income to 90% of their winnings, rather than the previous 100%.
Congrats on the winnings*
In other words, someone gambling could pay tax on net winnings that aren’t actually net winnings, but losses.
"They'd literally be paying taxes on money they don't have,” said Sen. Catherine Cortez Masto, a Democrat from Nevada and the sponsor of the Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act, which would undo the change to the loss deduction.
“This makes no sense,” Cortez Masto added on Thursday in the Senate. “And it will do irreparable harm to our country's gaming industry if it takes effect, especially in Nevada."
Senate Republicans just blocked @SenCortezMasto and my attempt to pass our bipartisan bill to repeal their misguided provision to unfairly tax gambling losses.
— Senator Jacky Rosen (@SenJackyRosen) July 10, 2025
I won’t stop fighting to reverse this harmful provision and protect Nevada’s gaming and tourism economy. pic.twitter.com/qyklvSXT19
Yet Cortez Masto’s bill, as well as that of her fellow Nevada lawmaker, Rep. Dina Titus, have been referred to Congressional committees. That leaves the timeline for if or when they may pass very much up in the air.
Cortez Masto sought unanimous consent on Thursday to rush her bill through the Senate, but the effort was blocked by an objection from a Republican senator from Indiana, Todd Young.
While Sen. Young was supportive of Cortez Masto's bill, he said he wanted to tweak her request to include an amendment. That amendment would include an exemption for qualified religious institutions from an excise tax on the investment income of certain private colleges and universities. Without the amendment, Young said he would not support the speedy process for the wagering deduction legislation.
That amendment was objected to, which led to Young objecting to Cortez Masto’s motion. That leaves the FULL HOUSE Act stuck in committee for the time being, just like Titus’ proposed FAIR BET Act.
The taxman cometh
All of the above leaves U.S. gamblers staring down the barrel of some tougher tax filings in 2026, barring any sudden shift in legislative pace.
While lawmakers in Congress were quick to pass Trump’s landmark legislation without much thought given to the wagering losses provision buried in it, they are poised to think much harder and longer about undoing the change.
What the tax changes will do to the U.S. gambling industry if left in place is a matter of debate at the moment. Lawmakers from states with casinos and online sports betting seem certain it will be bad, but some analysts see the impact as more targeted, affecting a relatively small group of people.
Jordan Bender, analyst at investment bank Citizens, wrote in a note to clients on July 7 that "[b]roadly, this only impacts a small portion of overall gamblers, mainly professionals, and we do not expect any longer-term impacts on the industry."
Even so, there could be turbulence for the industry as a result of the “big beautiful” changes. While Bender wrote that they view the fears of the tax tweaks killing the sports betting industry as “overblown,” they also see the possibility of sharper bettors taking more of their business offshore.
“It is fairly well known at this point that legal sportsbooks limit wagering sizes or push away winning customers, whales, or sharps,” Bender wrote. “This cohort of winning players is more likely to be betting offshore or with more traditional market-making books like Circa (private). VIPs, who can account for 25% to 50% of company revenue, are no different, as these sports betting companies are only catering to these players, knowing they are net losers in the long run, which would not be impacted by the incremental taxation. That said, we cannot write off the potential damage this bill will do long-term for professional bettors, and we do see some level of migration to the offshore markets under the current model.”
The failure of the Senate’s unanimous consent measure is not surprising. The Senate got us into this mess and it’s now time for both chambers to unite behind my bipartisan FAIR BET Act to ensure that average and high-stakes gamblers do not pay taxes on money they never won.
— Dina Titus (@repdinatitus) July 10, 2025
If…
With all that said, the ominous feeling some have has led to bipartisan support for legislation to undo the wagering losses change.
For example, Texas Sen. Ted Cruz, a Republican, is a co-sponsor of Cortez Masto's bill. However, that support was not enough to speed the legislation through the chamber on Thursday, leaving gamblers facing the possibility of paying tax on phantom winnings.
“I'm not done fighting for our businesses and workers,” Cortez Masto tweeted on Thursday. “Their tax hike is a bad deal for Nevada, and I'll keep working to repeal it.”
