House Rules Panel Blocks FAIR BET Act Ahead of 2026 Gambling Tax Changes
House Rules Committee Halts FAIR BET Act from Advancing
A renewed initiative in Washington aiming to restore full deductions for gambling losses has encountered another obstacle. This development leaves bettors and industry stakeholders preparing for significant tax changes set to take effect in 2026.
Recently, the House Rules Committee decided against forwarding the FAIR BET Act, preventing its inclusion in the National Defense Authorization Act and blocking its progression to the House floor.
Overview of the FAIR BET Act and Current Tax Restrictions
The FAIR BET Act, championed by Nevada representative Dina Titus, intends to reverse recent federal tax limitations on gambling losses. Presently, gamblers can only deduct losses up to the amount they report as winnings, with no option to write off further gambling expenses even if their total yearly results are negative. Additionally, a provision from the comprehensive One Big Beautiful Bill will further tighten regulations starting in the 2026 tax year by capping deductions at 90% of total losses.
Rep. Titus argues that this new limit could force some individuals to pay taxes on income they did not actually make. She also warns that restricting deductions might push some bettors towards offshore gambling platforms, which lack regulatory protections. Titus attempted to attach this amendment to the defense bill—a common strategy to pass tax-related measures—but House leadership rejected it, citing concerns that restoring full deductions would reduce federal revenue and was unrelated to the defense bill’s purpose.
Industry Response and Senate Position on Deduction Limits
Several trade organizations representing casinos, online sportsbooks, and horse racing tracks have supported Titus’s initiative. They argue that the current restrictions complicate fair reporting and impose administrative burdens on both casual and professional gamblers. According to these groups, allowing full loss write-offs promotes transparency and benefits regulated gambling markets. Conversely, conservative advocacy organizations and some Republican lawmakers oppose expanding gambling deductions, especially amid broader federal budget discussions.
Resistance also exists within the Senate, particularly among members of the Finance Committee who appear reluctant to reconsider the deduction cap. Some senators view the 90% limit as a minor adjustment that does not warrant reversal. A separate bill introduced by Senator Catherine Cortez Masto aimed at eliminating the reduction has not advanced and remains without a scheduled hearing.
Preparing for the 2026 Tax Year and Future Outlook
With the 2026 tax regulations poised to take effect, tax professionals advise gamblers to prepare for the upcoming changes. Individuals who break even or sustain small losses could still face federal tax liabilities. Representative Titus continues to advocate for adjusting these rules in future tax negotiations, but the outcome is uncertain and largely depends on shifting political priorities. At present, the deduction limit remains firmly in place.
