Senator Lankford Opposes Full Deduction for Gambling Losses
Opposition from Senator Lankford
The ongoing effort to reinstate full tax deductions for gambling losses has encountered a significant obstacle from Senator James Lankford, a Republican from Oklahoma. Senator Lankford, who previously served in the US House of Representatives and was decisively elected to the Senate in 2014, has openly opposed bipartisan legislation intended to allow gamblers to deduct 100% of their losses against any winnings.
Resistance to Bipartisan Support
Despite bipartisan backing and broad support from both chambers of Congress, Senator Lankford’s stance represents a clear challenge to these legislative efforts. His opposition was highlighted in a report by Punchbowl News and adds another layer of complexity to the proposed changes.
This issue has become increasingly urgent as new tax rules in effect this year now cap gambling loss deductions at 90%. Practically, this means that a gambler who reports $10,000 in winnings and equals the same amount in losses must still pay taxes on $1,000 that they never actually profited from. Critics argue that this effectively taxes phantom income, which they view as unjust.
Background and Legislative Attempts
The limitations on gambling loss deductions stem from legislation passed last July, often referred to as the “One Big Beautiful Bill.” While the House’s version did not alter gambling deduction rules, a last-minute addition in the Senate reduced the allowable deduction to 90%. This unexpected Senate amendment left many gamblers and gaming industry advocates seeking solutions.
In response, Representative Dina Titus, a Democrat from Nevada, introduced a bill aimed at restoring full gambling loss deductions. Shortly thereafter, Republican Representative Andy Barr from Kentucky proposed a similar bill. The two representatives have shown mutual support for each other’s initiatives, gathering nearly two dozen cosponsors in total.
Concerns and Industry Impact
Advocates for restoring full deductions argue that the new rule unfairly taxes nonexistent income and could dissuade high-stakes gamblers from participating in regulated casinos and sportsbooks. Although only a small number of taxpayers itemize their gambling losses, industry experts warn that these gamblers contribute a significant share of betting activity. There is concern that the deduction cap could result in billions of dollars in lost revenue for the gaming sector.
Legislative Hurdles Ahead
Progress toward restoring full deductions has been slow. Neither bill has yet been brought to a vote by Representative Jason Smith, chair of the House committee in charge of tax legislation, despite his public statements in support of the cause. Moreover, the Senate presents additional challenges; a previous attempt to pass the amendment through unanimous consent was unsuccessful, and Senator Lankford’s opposition suggests resistance continues.
Supporters of the change maintain optimism, pointing to what they regard as the clear unfairness of the current tax code. They hope lawmakers will ultimately address this issue to ensure fair treatment for gamblers under the tax system.
