Senate Blocks Bill to Restore Full Gambling Loss Deductions
The Senate Halts Plan to Reverse Gambling Tax Adjustment
A recent legislative effort to reverse a contentious tax change affecting gambling losses in the United States was blocked in the Senate on July 10. This move prevented the reinstatement of full deductions for gamblers, a change that has sparked considerable debate.
Republican Opposition Stalls Restoration of Full Gambling Loss Deductions
Nevada Senator Catherine Cortez Masto led an initiative known as the FULL HOUSE Act, which sought to overturn a part of the latest tax reform supported by Republicans. The reform, signed into law by former President Donald Trump in the prior week, limits gambling loss deductions to 90% of winnings instead of allowing gamblers to deduct their losses fully. Critics argue this cap could result in gamblers being taxed despite not turning a profit.
Despite Senator Cortez Masto’s attempts to expedite the bill’s approval by bypassing certain committee procedures, Senator Todd Young of Indiana, a Republican, blocked the effort. Although Young expressed support for the bill’s objective, he wanted to attach a provision that would reduce taxes on religious school funds. This addition faced resistance and complicated the legislative process.
Senator Ron Wyden from Oregon, the ranking Democrat on the Senate Finance Committee, criticized Young’s tactic as an improper insertion of special-interest amendments into unrelated legislation. Wyden also highlighted that many senators were unaware of the gambling tax provision until it had already been enacted, underscoring concerns about the rushed nature of the tax law’s passage.
Concerns Over Gambling Tax Change Impact on Bettors and Economy
The thwarted proposal has ignited intense discussions, especially in Nevada, home to the nation’s largest gambling industry. Senator Cortez Masto warned that the tax limitation could hurt not only Las Vegas but also the broader U.S. betting industry by driving players toward unregulated or offshore gambling websites.
She expressed frustration with the secrecy surrounding the over 900-page tax bill, which left many senators scrambling to understand its contents. Cortez Masto remarked that several Republicans only learned about the gambling deduction restriction after it was publicized by the poker community.
Despite the legislative setback, Senator Cortez Masto vowed to continue advocating for repeal efforts, emphasizing bipartisan support including from Republican Senator Ted Cruz. Meanwhile, Nevada Representative Dina Titus is also championing a repeal bill in the House, supported by members across party lines.
The gambling tax rule has faced widespread criticism for being unfair to gamblers nationwide. Although projected to generate over $1 billion in revenue over eight years, opponents contend it disadvantages both professional gamblers and casual participants involved in activities like fantasy sports and slot machines. Senator Cortez Masto remains committed to opposing the tax change, cautioning that it could undermine local economies dependent on tourism and gaming, while possibly encouraging illegal gambling operations.