Senator Lankford Blocks Full Gambling Loss Deduction

The long-running push to restore full tax deductions for gambling losses has hit yet another snag, and this one comes from the Oklahoma Republican Sen. James Lankford. 

A Sign of Resistance

The Senator, who served four years in the US House of Representatives for central Oklahoma and was “overwhelmingly elected” to the US Senate in 2014, bluntly expressed his view against bipartisan legislation aimed at bringing back the ability for gamblers to deduct 100% of their losses against winnings. 

His comments, first reported by Punchbowl News, mark one of the clearest signs of resistance to a proposal that has drawn support from both parties and both chambers of Congress.

The timing matters, as, starting this year, gamblers who itemize their taxes will only be allowed to deduct 90% of their losses. What does this mean in practice? Someone who reports $10,000 in winnings and the same amount in losses still owes taxes on the $1,000 they never actually pocketed. 

Critics have been quick to label that outcome unfair, arguing it amounts to taxing money that does not exist.

Looking for a Fix 

The change traces back to the One Big Beautiful Bill, which became law last July. The House version did not include any change to the gambling deduction, but a late Senate addition capped deductions at 90%. That version ultimately passed, leaving gamblers and the gaming industry scrambling for a fix.

Soon after, Democratic Rep. Dina Titus of Nevada introduced a bill to restore the full deduction. Republican Rep. Andy Barr of Kentucky followed with nearly identical legislation. 

The two lawmakers have backed each other’s efforts, hoping that a Republican-led bill might find an easier path in the GOP-controlled Congress. Between them, the proposals have picked up close to two dozen cosponsors.

Supporters argue the current rule taxes “phantom” income and could push high-volume gamblers away from regulated casinos and sportsbooks. 

While only a small share of taxpayers itemize their gambling losses, industry groups are concerned that those players actually account for a disproportionate amount of betting activity, with some warning the change could lead to billions in lost revenue.

Despite that concern, progress has been slow, as neither bill has been scheduled for a vote by Rep. Jason Smith, the House committee chair responsible for overseeing tax legislation, even though he has said publicly that he supports the idea. 

Even if the House moved first, the Senate remains a hurdle. A previous attempt to pass the change by unanimous consent failed, and Lankford’s comments suggest similar resistance still exists. 

For now, supporters remain hopeful that lawmakers will eventually act, pointing to what they see as the obvious inequity of the current tax rule.