Lawmakers and industry advocates are renewing their efforts to roll back a controversial change to the US tax code that alters how gambling losses are treated. Gambling sector stakeholders warn that the new rule risks undermining the broader betting economy and unfairly penalizing players who do not even turn a profit. While previous efforts have largely stalled, this recent push enjoys significant momentum.
Bipartisan Pushback Intensifies
The ongoing debate centers on a provision included in President Donald Trump’s One Big Beautiful Bill Act that caps the deductibility of gambling losses at 90% of winnings. This amendment sharply contrasts decades of precedent that allowed gamblers to deduct losses fully against gains. A person who wins and loses the same amount in a year could now face a tax bill despite making no profits.
The rising discontent from this contentious provision has united lawmakers from both parties. Rep. Steven Horsford of Nevada and Rep. Max Miller of Ohio recently introduced HR 6985, a bill designed to restore the long-standing deduction. The proposed legislation aims to reset the rules retroactively, starting with the 2026 tax year.
Americans should not be taxed on money they didn’t actually take home. By restoring the full deduction for gambling losses, this bill ensures honesty and consistency.
Ohio Rep. Max Miller
Enduring bipartisan support underscores the severity of the matter. Other lawmakers beyond Horsford and Miller have launched similar initiatives. The FAIR Bet Act, supported by Nevada Rep. Dina Titus, is the most well-known. While the bill has struggled to reach the House floor, it enjoys considerable backing by trade groups and other industry representatives.
The Gambling Sector Fully Supports Such Efforts
Supporters of full loss deductions argue that restoring the previous status quo is a matter of basic justice, as other volatile activities, such as securities trading or commodity speculation, have never been subject to such taxes. Casinos and tourism businesses remain the most outspoken proponents for a reversal, especially in tourism-centric states like Nevada.
Casino operators worry that the change will discourage experienced, high-volume players as they migrate to black market alternatives. Online sportsbooks and poker platforms have also raised alarms, warning that the change may complicate bookkeeping and impose unnecessary burdens on casual bettors. They argue that partial deductibility may push consumers away from regulated markets.
Taxing people on money they never actually earned is fundamentally unfair and harmful to Nevada’s economy.
Nevada Rep. Steven Horsford
Despite growing pushback, resistance remains. Some lawmakers have downplayed the significance of the change, labeling it as a minor tweak rather than a significant overhaul. Fiscal conservatives instead argue that reversing the change would negatively impact the budget. In the Senate, key members of the Financial Committee appear disinclined to address the topic, and similar efforts in recent months have stalled without receiving hearings.