Trump’s Gambling Tax Cap Sparks Controversy and Legislative Response

Introduction to the Gambling Tax Cap Debate

Representative Dina Titus is spearheading a campaign to overturn a contentious tax rule embedded in recent federal legislation. This new rule, part of a large fiscal package endorsed during President Donald Trump’s administration, restricts gamblers from fully deducting their losses, allowing only 90% of losses to be written off against winnings. The move has generated mixed reactions across various gambling and financial communities.

Legislative Effort to Reverse the New Tax Provision

The tax change, enacted under the “One Big Beautiful Bill Act,” has significantly unsettled professional gamblers and high-stakes bettors. These individuals face a scenario where they might owe taxes despite net losses because the tax law no longer permits a full offset of losses against winnings. Previously, gamblers could deduct their entire losses when itemizing deductions, preventing taxation on nonexistent income.

Under the current framework, a gambler who wins $500,000 but loses the same amount would still be liable for taxes on the difference, which effectively represents income never retained. This shift has mobilized Nevada Congresswoman Dina Titus to renew her efforts to advocate for the gambling community by proposing the FAIR BET Act.

“My FAIR BET Act aims to restore the full deduction of gambling losses to ensure bettors are not taxed on funds they haven’t actually gained,” said Rep. Dina Titus.

The proposed legislation seeks to revert the tax treatment to its prior state, fully restoring the deductibility of gambling losses. This change is intended to protect lawful gambling activities, preserve the sector’s integrity, and discourage bettors from turning to unregulated markets.

Market Perspectives on the Tax Adjustment

While many in the gambling industry express concern over these tax changes, some professionals remain optimistic or see limited impact. Jordan Bender, an analyst with Citizens Capital Markets and Advisory, points out that the new tax rules predominantly affect a small subset of gamblers focused on poker and advantage play strategies. He suggests that most other gambling sectors should continue to perform steadily or may even experience growth.

Bender notes a trend of high-stakes players moving towards offshore gambling platforms that offer more competitive terms and fewer tax restrictions. However, the broader casino and sports betting markets, which typically rely on occasional players who generally lose, are expected to remain stable despite potential shifts in player demographics.

Additionally, emerging platforms such as prediction market operators Kalshi and Polymarket operate outside traditional gambling frameworks and could benefit by avoiding the new tax pressures. As the gambling industry adapts, calls to reconsider the tax cap and swiftly restore previous deductions are gaining attention among lawmakers and analysts alike.