Lawmakers Push to Restore Full Deductibility of Gambling Losses
Renewed Congressional Efforts to Reverse Gambling Loss Deduction Limits
Lawmakers in Congress are once again pressing to overturn a recent tax code amendment that restricts the amount of gambling losses individuals can deduct. This change has caused uncertainty for professional gamblers, casinos, and other key figures in the gambling industry. The topic resurfaced recently during a House Rules Committee hearing on HR 7148, a comprehensive appropriations bill now being considered as a potential solution.
Growing Support to Undo the Deduction Cap
The renewed initiative is led by Representative Dina Titus, who reintroduced the FAIR BET Act. Her proposal seeks to reverse a provision implemented late last year that limits deductible gambling losses to 90% of a gambler’s winnings. This cap was part of President Donald Trump’s “One Big Beautiful Bill,” passed by Congress over six months ago.
This policy represents a significant departure from decades of tax rules that allowed gamblers to deduct losses on a dollar-for-dollar basis against their gains. Under the new rule, a gambler who breaks even — winning and losing equal amounts — could still owe tax on 10% of those earnings, despite not having made an actual profit.
The pushback against this cap has drawn unusual bipartisan backing. Representatives Steven Horsford from Nevada and Max Miller from Ohio recently introduced a separate bill to reinstate full loss deductions, characterizing the reversal as a necessary correction rather than a tax cut. Although similar attempts have stalled in recent months without formal hearings, momentum for change is building.
Industry Voices Call for Full Deductibility
The 90% deduction limit poses considerable challenges for the gambling industry. Professional gamblers, who often operate with thin profit margins, warn that this change could compel them to reduce their betting activity or seek offshore, unregulated markets. Many express frustration about being taxed on money they never actually retain.
Industry associations share these concerns. Casino operators and sportsbooks argue that the cap deters high-stakes players and highlight that comparable high-risk financial fields, such as stock or commodity trading, do not face similar deduction restrictions. Opponents also contend the rule complicates financial record-keeping without significant tax revenue benefits.
Attaching the proposed fix to a critical spending bill might offer the most viable path forward, though the amendment could still be removed during legislative negotiations. For now, momentum is growing in what could become a defining debate for the future of the United States gambling sector.
