A coalition of prominent executives from Las Vegas casinos is urging U.S. lawmakers to reinstate the federal tax deduction for gambling losses to a full 100%, cautioning that any reduction could negatively impact tourism, gaming activity, and associated employment.
The One Big Beautiful Bill Act (OBBBA) proposes to reduce the amount gamblers can claim as a deduction from their winnings to 90%, effective January 1, 2026. Leaders within the industry assert that this provision was mistakenly included during legislative discussions and are seeking bipartisan backing to amend it.
“This adjustment was unintentional within the framework of the One Big Beautiful Bill. There are many challenging issues that the government faces, but this shouldn’t be one of them,” stated Derek Stevens, owner of Circa, Golden Gate, and The D casinos in downtown Las Vegas.
Stevens recently convened with U.S. Representative Jason Smith, a Republican from Missouri and chair of the House Ways and Means Committee, along with MGM Resorts CEO Bill Hornbuckle, Caesars Entertainment CEO Tom Reeg, Wynn Resorts CEO Craig Billings, and American Gaming Association (AGA) President Bill Miller. The group appealed to Smith to support legislation that would restore the full deduction.
Representative Dina Titus, a Democrat from Nevada, has put forth the FAIR Bet Act aimed at reverting the deduction back to 100%. This bill has garnered support from 21 co-sponsors, including 13 Democrats and eight Republicans. In the Senate, Democrats Catherine Cortez Masto of Nevada and Republican Ted Cruz of Texas are backing the FULL HOUSE Act with similar objectives.
Stevens reported that Smith encouraged industry advocates to engage their constituents to contact their officials in support of these initiatives.
Casino executives and lobbyists argue that a reduced deduction would require gamblers to pay taxes on “phantom” income, which would disproportionately impact professional gamblers, high-stakes players, and jackpot winners. Stevens noted that this uncertainty is already influencing travel and betting decisions.
“It’s concerning that we’re witnessing this impact, with potential customers hesitating to book because of this situation,” he remarked. “This will unequivocally affect tourism, both here and across the nation, which is why I am advocating for change.”
The American Gaming Association expressed its support for restoring full deductibility, alongside major operators like MGM, Caesars, and Wynn, as well as DraftKings, FanDuel, and the National Thoroughbred Racing Association.
“The AGA is dedicated to collaborating with Congress and the administration to reinforce the principle of 100 percent deductibility,” declared Chris Cylke, the AGA’s senior vice president of government relations.
An MGM Resorts representative stated that the company “strongly advocates for a resolution to this issue,” describing it as a fairness matter impacting employees, patrons, and the state of Nevada.
Titus warned that this change could push players towards offshore and unregulated gambling markets. “While this may seem like a minor adjustment, it could have far-reaching and negative implications,” she expressed in a letter urging Smith to arrange a committee hearing before the holiday break.
As the legislative calendar for the end of the year tightens, industry officials are conceding that the likelihood of restoring the deduction before 2026 is waning. Nonetheless, they observe that Congress could possibly retroactively reinstatethe change to January 1, 2026.
The gambling provision surfaced during Senate budget reconciliation discussions, and no legislators have claimed responsibility for its inclusion. President Donald Trump signed the OBBBA into law this past summer.
When questioned this week about eliminating federal taxes on gambling winnings, Trump responded: “No tax on gambling? I’m not sure about that. I will have to think it over.”