Lawmakers Renew Push to Restore Full Gambling Loss Deductions

Congress again faces pressure from lawmakers who aim to reverse a recent change to the tax code that limits the amount of losses gamblers can deduct, a provision that has created uncertainty for professional players, casinos, and other industry stakeholders. The issue resurfaced this week during a House Rules Committee hearing on HR 7148, a broad appropriations bill that has become the latest vehicle for a potential fix.

Efforts to Reverse the Change Are Gaining Momentum

This newest push comes from Rep. Dina Titus, who reintroduced her FAIR BET Act. Her amendment aims to reverse a change enacted late last year that capped deductible gambling losses at 90% of winnings. The cap appeared in President Donald Trump’s “One Big Beautiful Bill,” which Congress approved more than six months ago.

The new rule marked a sharp break from decades of tax policy that allowed gamblers to deduct losses dollar-for-dollar against their gains. Under the revised policy, a bettor who wins and loses the same amount over a year could still owe taxes on the remaining 10% even though they end the year with no actual profit.

Efforts to reverse the cap received rare bipartisan support. Rep. Steven Horsford of Nevada and Rep. Max Miller of Ohio recently introduced a separate bill to restore full deductions, framing the change as a necessary correction rather than a tax break. While similar efforts in recent months have stalled without receiving hearings, the calls for change are becoming difficult to ignore.

The Gambling Sector Firmly Supports Full Deductions

A 90% cap could have significant implications for the broader sector.  Professional gamblers, who often operate on thin margins, warn that the change could force them to scale back their activity or move their operations to unlicensed operators. Many have raised concerns about being taxed on income they never actually get to keep.

Industry groups have issued similar warnings. Casino operators and sportsbooks argue that the cap will push away high-rolling players. They also note that other high-risk financial activities, such as trading stocks or commodities, are not subject to comparable limits on loss deductions. Critics also claim that the rule unnecessarily complicates bookkeeping without delivering meaningful revenue gains.

Titus’s move to attach the proposed fix to a must-pass spending bill may offer the most realistic solution. However, the amendment may still be stripped during negotiations. For now, though, momentum has returned to a debate that could prove pivotal for the future of the broader USA gambling sector.