Senate GOP Blocks Bill to Restore Full Gambling Deductions
Senate Republicans Halt Effort to Reinstate Full Gambling Loss Deductions
On Thursday, Senate Republicans blocked a Democratic proposal aimed at reversing a recent tax change that professional gamblers warn could severely damage their industry.
Nevada Democrat Catherine Cortez Masto pushed for the swift approval of legislation that would reinstate the full deduction for gambling losses. However, Indiana Republican Todd Young opposed the measure, effectively stalling the bill.
Young expressed his support for the bill in principle but indicated he would object unless certain conditions were met, implying he might negotiate for amendments or additional provisions.
The Tax Change Threatens the Future of Professional Gambling in the U.S.
The contested tax rule was part of a $3.3 trillion tax and spending package signed into law by President Donald Trump last week, known as the One Big Beautiful Bill Act. While this legislation received backing from the American Gaming Association, it also includes limits on how much gamblers can deduct starting in 2026.
Previously, gamblers could deduct 100% of their losses up to the amount they won, but the new law reduces this cap to 90%. As a result, even players who roughly break even could face tax liabilities.
Professional poker player Phil Galfond warned that this change could effectively end professional gambling in the United States and negatively affect casual players. For instance, under the new rule, a gambler who wins $100,000 but also loses $100,000 in a year would only be able to deduct $90,000, resulting in taxable income despite no net financial gain.
Tax Provision Expected to Generate $1.1 Billion Over Eight Years
Critics argue that this provision was added to the bill with minimal scrutiny, as the legislation spans over 900 pages and contains numerous complex changes that many lawmakers are still trying to fully understand.
Cortez Masto noted that many senators, both Republican and Democrat, were unaware that this policy was included in the final tax package.
Senate Finance Committee Chair Mike Crapo finalized the provision when releasing the bill text on June 16, just days before the vote.
Senator Ron Wyden, the top Democrat on the Finance Committee, criticized the rushed process, warning that hastily passing such policies can have unintended consequences for constituents.
The Joint Committee on Taxation estimates that this modification will raise approximately $1.1 billion over the next eight years. Supporters among Republicans defend the comprehensive bill as a necessary reform achieved through the reconciliation process, which bypassed a potential Democratic filibuster.
Despite the setback, Cortez Masto remains determined and has introduced a bipartisan bill to fully restore the gambling loss deduction, which will advance through committee review. In the House, Nevada Democrat Dina Titus is leading a similar effort to address this issue.
