A new effort in Washington to bring back full deductions for gambling losses has hit another big snag, leaving bettors and industry groups ready for a tax scene that changes a lot in 2026.
Effort to Add FAIR BET Act to Defense Bill Fails in House Rules Committee
The latest problem happened when the House Rules Committee chose not to move the FAIR BET Act forward, stopping the plan from being added to the National Defense Authorization Act and keeping it from getting to the House floor.
The FAIR BET Act, backed by Nevada’s Rep. Dina Titus, seeks to undo restrictions put in place by recent federal tax changes. Right now, gamblers can deduct losses up to the amount they report as winnings. They cannot write off any extra gambling costs even if they end up losing money overall for the year. A rule in the big sweeping One Big Beautiful Bill made things even tighter. Starting in the 2026 tax year, it will limit allowed deductions to 90% of losses.
Titus claims the new structure might force people to pay taxes on money they did not earn. She also believes limiting the deduction could drive some gamblers to use offshore platforms without any safeguards for users. She tried to add this measure to the defense bill, following a typical approach of combining tax changes with must-pass laws. However, House leaders decided the amendment did not fit the NDAA’s purpose and worried that bringing back the full deduction would cut into federal income.
Gambling Groups Press for Relief While Senate Leaders Hold Line on 90% Cap
Trade groups have supported Titus’ position. Associations for casinos, online betting sites, and horse tracks claim the rule change messes up fair reporting and puts extra work on casual and professional gamblers alike. They say allowing full write-offs encourages openness and helps regulated markets. But right-wing advocacy groups and some GOP lawmakers disagree, arguing that gambling deductions should not grow when bigger budget talks are coming up.
The pushback reaches the Senate, too, where important Finance Committee members do not seem keen to revisit the deduction limit. A few committee members call the 90% threshold a small tweak and see no need to change course. A different bill from Sen. Catherine Cortez Masto to undo the reduction has gone nowhere, with no hearing scheduled.
Now that the 2026 rules are active, tax experts are telling regular gamblers to start getting ready for the changes. They point out that people who break even or lose a little money by the end of the year might still owe federal taxes. Titus wants to keep pushing for changes in future tax talks, but what happens next depends a lot on changing political goals. For now, the new limit on deductions is not going anywhere.