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The Fight to Restore Full Federal Gambling Loss Deduction: A Comprehensive Guide

By jili tutorial · September 16, 2026

The Fight to Restore Full Federal Gambling Loss Deduction: A Comprehensive Guide

Overview: Why the 100% Deduction Matters

Nevada Representative Dina Titus continues to lead the charge to restore the full federal tax deduction for gambling losses. The current 90% rate, introduced by the One Big Beautiful Bill Act signed by President Donald Trump on July 4, 2025, has created a situation where gamblers can be taxed on money they never actually earned. This guide breaks down the issue, the proposed legislation, the political obstacles, and what it all means for taxpayers.

The Current State of Gambling Loss Deductions

The One Big Beautiful Bill Act of 2025

The sweeping tax law that took effect in mid-2025 included a provision reducing the federal deduction for gambling losses from 100% to 90%. Previously, gamblers could deduct all losses against winnings, meaning they only paid taxes on net profit. Under the new rule, only 90% of losses can be deducted.

How the 90% Rate Creates Unfair Taxation

To understand the problem, consider this example:

Under the old 100% deduction, taxable income from gambling would be $0. Under the new 90% rule, only $90,000 can be deducted, leaving $10,000 of taxable gambling income. The bettor must pay income tax on $10,000 they never kept.

Key point: The tax system now treats losses as income, which critics argue is fundamentally unfair. Representative Titus has made this discrepancy the centerpiece of her campaign, stating, “The tax system should measure what players actually keep, rather than treating losses as income.”

The FAIR BET Act: A Bipartisan Push for Fairness

Key Provisions

The FAIR BET Act (Full Accountability in Revenue and Betting Earnings Taxation Act) would undo the 90% provision and restore the full 100% deduction for gambling losses. Introduced by Rep. Dina Titus, the bill has garnered strong bipartisan support—a rarity in today’s polarized Congress.

Companion Bill in the Senate

Democratic Senator Catherine Cortez Masto of Nevada has introduced the FULL HOUSE Act, which aims to achieve the same goal in the upper chamber. Both bills reflect a united Nevada delegation’s effort to protect the state’s gambling industry and its taxpayers.

Political Hurdles and Competing Legislation

The WAGER Act: An Alternative Approach

While House Ways and Means Committee Chairman Jason Smith has expressed support for returning to the 100% deduction, he has favored the WAGER Act (Wagering and Gaming Excise Reform Act) introduced by Rep. Andy Barr in July 2025. However, that bill has not yet received a committee vote, casting doubt on the House’s overall motivation to address the issue.

Procedural Roadblocks in the Senate

Senate GOP leaders have blocked efforts to restore the 100% rate on procedural grounds, arguing that tax-related legislation should originate in the House. This has stalled both the FAIR BET Act and the FULL HOUSE Act, neither of which has received a floor vote.

A Lack of Political Will

Despite bipartisan support, the gambling deduction issue competes for congressional attention with higher-priority items such as defense spending and cryptocurrency regulation. Representative Titus remains undeterred: “I urge my colleagues to include a fix to restore the 100% tax deduction for gambling losses. I will not stop fighting until we finally see this over the finish line.”

Broader Context: Gambling Regulation and Sports Betting

Titus’ Other Legislative Efforts

In addition to the FAIR BET Act, Titus has backed the Fair Markets and Sports Integrity Act, which would restrict prediction markets from offering sports-related contracts. She argues that states should maintain their authority over all forms of wagering. This reflects her broader commitment to a fair and well-regulated gambling ecosystem.

Why This Matters Beyond Nevada

While the issue is especially critical for Nevada—where gambling is a major industry—it affects taxpayers nationwide. Casual sports bettors, poker players, and even lottery winners in states with legal gambling can face unexpected tax bills due to the 90% rate. The change has implications for tax fairness and the accuracy of income reporting.

What Happens Next? The Road Ahead

The FAIR BET Act remains pending in the House Ways and Means Committee. With the 2026 midterm elections approaching, the timeline for action is uncertain. Key factors to watch:

For now, Rep. Titus continues her fight, emphasizing that the core issue is simple: gamblers should not be taxed on money they never earned. Whether Congress agrees remains to be seen.