A U.S. House committee has dismissed a measure proposed by Nevada Democrat Rep. Dina Titus aimed at reinstating the full federal tax deduction for gambling losses, upholding a cap established during the Trump administration.
The House Rules Committee, which is controlled by Republicans, this week prevented Titus’s Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET Act) from being included as an amendment to the National Defense Authorization Act (NDAA). This legislation would have undone a modification made in the 2017 Tax Cuts and Jobs Act, which reduced the deduction for gambling losses from 100% to 90%, a change expected to generate $1.1 billion in revenue over eight years.
The existing limit implies that gamblers may incur tax liabilities even when their total losses surpass their winnings. For instance, an individual who wins $10,000 but loses $12,000 can only deduct $10,000.
“Regrettably, the GOP-controlled Rules Committee rejected the FAIR BET Act as an amendment to the NDAA,” Titus remarked on X. “This was a straightforward solution that should have been accepted. Nevertheless, I will persist in rallying support to reinstate the 100% gambling loss deduction.”
Titus presented the FAIR BET Act in July, aiming to advance it alongside the defense bill in August. She plans to continue advocating for this adjustment in forthcoming tax discussions, particularly in 2026, when significant elements of the 2017 tax legislation are due to expire.
Other legislators have proposed similar initiatives, including Kentucky Republican Andy Barr’s WAGER Act and Nevada Democratic Senator Catherine Cortez Masto’s FULL HOUSE Act, though neither has progressed.
Republicans argue that the 90% cap is essential for safeguarding federal revenue, while some conservative factions contend that gambling losses should not be deductible at all. The American Gaming Association and other industry stakeholders advocate for the restoration of the full deduction, highlighting its importance for equitably treating both recreational and professional gamblers.
Titus has also intensified her efforts to abolish the federal sports betting excise tax, which has been in effect since 1951. “The Discriminatory Gaming Tax Repeal Act of 2025 eliminates a tax that serves only to penalize legitimate gaming operators for creating thousands of jobs in Nevada and 37 other states nationwide,” she said while introducing the bill.
“Illegal sportsbooks bypass the .25% sports handle tax and the associated $50 per head tax on sportsbook employees, giving them an unfair leg up,” she continued. “I once inquired with the IRS about the revenue generated from the handle tax and they were unsure of its allocation in the federal budget.”