Last week, a bid to reinstate the complete federal tax deduction for gambling losses failed in the U.S. Congress. The proposed amendment, part of nearly 70 reviewed, did not pass through the House Rules Committee, which means the gambling tax initiative was omitted from a crucial spending bill.
This amendment aimed to enable gamblers to deduct 100% of their losses during annual federal tax returns. The committee chose not to promote this measure for inclusion in the Consolidated Appropriations Act, which was approved by the House on Thursday.
The initiative was designed to undo a tax modification made last year under the One Big Beautiful Bill (OBBB) Act. This legislation restricted deductions for gambling losses to 90%. Industry champions and tax experts have indicated that this limit could lead to a taxable “phantom income” for bettors who break even over a yearly period.
The Las Vegas Review-Journal disclosed that U.S. Representative Dina Titus, D-Nev., presented her support for adding the deduction language to the spending bill before the House Rules Committee on Wednesday. Her suggestion was evaluated alongside many other amendments.
Officials from the gambling sector and tax consultants assert that the 90% restriction predominantly impacts professional gamblers and high-stakes bettors, who may face tax responsibilities on earnings that are not fully realized. Experts believe poker players, high-limit slot players, and sports bettors will experience the most immediate effects.
On Friday, Titus expressed her disappointment regarding the decision of the House Rules Committee not to advance legislation aimed at restoring the complete 100% deduction for gambling losses.
“I took the lead in advocating for (restoring the 100% deduction) through the FAIR BET Act I presented last July after discovering this tax on phantom winnings hidden in the OBBB,” Titus stated. “From the start, I’ve maintained that rectifying this injustice is paramount — it simply needs to be addressed. It concerns correcting a fundamental unfairness that impacts every individual who engages in gambling.”
The rejection leaves the proposal without a legislative pathway unless legislators incorporate it into another essential bill in the near future or facilitate its progress through separate legislation.
Titus and other members of Nevada’s congressional delegation have affirmed their intention to persist in pursuing a modification via upcoming bills.
In the Senate, U.S. Senators Catherine Cortez Masto and Jackie Rosen, both Democrats from Nevada, along with U.S. Senator Ted Cruz, a Republican from Texas, are co-sponsors of the FULL HOUSE Act, which would also reinstate the complete deduction.
In December, executives from major Las Vegas casinos and prominent representatives from the gambling industry’s leading lobbying group met with U.S. Representative Jason Smith, R-Mo., chair of the House Ways and Means Committee, to advocate reinstating the 100% deduction for gambling losses.
“There will be additional chances this year to integrate this dialogue into another piece of legislation on the House floor,” Titus remarked. “I will seize those opportunities until we achieve this objective.”