Key Moments:
- A U.S. House committee has declined an amendment that would have reinstated the full federal tax deduction for gambling losses.
- The current 90% deduction limit, established in the 2017 Tax Cuts and Jobs Act, remains in effect and is projected to generate $1.1 billion over eight years.
- Multiple legislative measures aimed at changing gambling-related tax rules have yet to move forward.
FAIR BET Act Blocked by House Rules Committee
A proposal by Representative Dina Titus of Nevada to restore the full federal tax deduction for gambling losses did not succeed in a recent U.S. House committee review. The House Rules Committee, which is controlled by Republicans, voted against including the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET Act) as an amendment to the National Defense Authorization Act (NDAA).
If enacted, this bill would have reversed a provision in the 2017 Tax Cuts and Jobs Act—reducing the deduction from 100% to 90%—a change forecasted to bring in $1.1 billion over eight years. As the law stands, gamblers can only deduct losses up to the amount of their winnings. For instance, someone with $10,000 in winnings and $12,000 in losses can deduct just $10,000, leaving them with a remaining $2,000 in losses that cannot be used to offset tax liability.
The fight to restore the 100% gambling loss tax deduction continues.
I’ve introduced the #FAIRBETAct as an amendment to the 2026 National Defense Authorization Act (NDAA).
I strongly encourage the Republicans to make this amendment in order when it goes before the House Rules…
— Dina Titus (@repdinatitus) August 27, 2025
Legislative Landscape and Political Debate
Representative Titus voiced her disappointment over the outcome in a post on X, stating, “Unfortunately, the GOP-controlled Rules Committee did not accept the FAIR BET Act as an amendment to the NDAA. This was an easy fix that should have been adopted. Nonetheless, I will continue to build support to restore the 100% gambling loss deduction.” Titus originally introduced the FAIR BET Act in July and attempted to advance it as part of the defense bill in August. She has indicated her intention to advocate for the full deduction in future tax discussions, notably in 2026 when several components of the 2017 tax law are due to expire.
Other lawmakers have introduced similar bills. Kentucky Republican Andy Barr put forward the WAGER Act, and Nevada Democratic Senator Catherine Cortez Masto introduced the FULL HOUSE Act, though neither has progressed. Proponents for maintaining the current deduction cap argue it supports federal revenue, while some conservative factions believe gambling losses should not be deductible at all. In contrast, groups such as the American Gaming Association have supported reinstating the 100% deduction, asserting it guarantees fair treatment for recreational and professional gamblers.
Push to Repeal the Federal Sports Betting Excise Tax
Beyond efforts regarding loss deductions, Representative Titus has also renewed advocacy to eliminate the federal sports betting excise tax, which has existed since 1951. Upon presenting the Discriminatory Gaming Tax Repeal Act of 2025, Titus said, “The Discriminatory Gaming Tax Repeal Act of 2025 repeals a tax that does nothing except penalise legal gaming operators for creating thousands of jobs in Nevada and 37 other states around the nation.”
She further stated, “Illegal sportsbooks do not pay the .25% sports handle tax and the accompanying $50 per head tax on sportsbook employees, giving them an unfair advantage. I once asked the IRS where the revenue from the handle tax went in the federal budget and they didn’t even know.”
Current Deduction and Legislative Proposals
| Deduction Status | Description | Projected Impact |
|---|---|---|
| Current (Post-2017) | Deduction reduced from 100% to 90% of gambling losses, capped at winnings amount | $1.1 billion raised over eight years |
| FAIR BET Act | Would restore 100% loss deduction on federal taxes | Not adopted; no change to current law |
| WAGER Act / FULL HOUSE Act | Other measures proposing changes to gambling tax deductions | Not advanced |
- Author
Daniel Williams
