Bill to Restore Gambling Loss Deductions Gains Momentum with New Supporters
New Support from Lawmakers on Repealing Gambling Loss Deduction Limits
The initiative to reverse the recent reduction in gambling loss tax deductions has received fresh support with two additional members of Congress endorsing the repeal effort.
Soto and Deluzio Join the Movement Against the Deduction Cap
Earlier this week, Nevada Representative Dina Titus revealed that Florida Democrat Darren Soto and Pennsylvania Democrat Chris Deluzio have joined as cosponsors of her FAIR BET Act. This legislation aims to restore the allowance for full gambling loss deductions for taxpayers.
Titus, who now enjoys the backing of nine cosponsors, expressed her commitment to advancing this bipartisan proposal through the legislative process.
The bill, officially designated H.R. 4304, remains under review in the House Ways and Means Committee, which oversees tax-related legislation. However, it has not yet been set for a vote, casting some uncertainty on the timeline for its progression.
This issue traces back to a provision tucked within the substantial One Big Beautiful Bill passed under the Trump administration. This expansive bill covers a variety of topics, but notably changed tax rules that now restrict deductions claimable on gambling losses, provoking dissatisfaction among affected parties.
Challenges Ahead in a Divided House
Previously, gamblers who itemized deductions could fully offset their winnings with their losses on tax returns. Following the new rule, this deduction is capped at 90%, reducing the benefit.
Although this change impacts a limited group of taxpayers who itemize their deductions, it has caused significant concern in the gambling industry, particularly in districts like Titus’s home base, Las Vegas.
Industry experts warn this cap may harm professional gamblers and potentially drive customers towards untaxed, unregulated gambling markets.
Supporters of the deduction limit argue that it will increase federal tax revenue by over $1 billion within the next ten years, though critics caution that this projection might not hold if legal gambling activity diminishes.
Representative Titus is actively seeking to strengthen bipartisan support despite the challenge of advancing such a proposal in a Republican-led House that currently favors maintaining the new revenue source.
In parallel efforts, Nevada Senator Catherine Cortez Masto attempted to fully restore gambling loss deductions through unanimous consent in the Senate earlier this month, but this effort was blocked, indicating continuing resistance in that chamber as well.
Lawmakers face a deadline before January 1, 2026, when the new deduction limits become effective.