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UKHouse Panel Advances Bill to Restore Full Gambling Loss Tax Deductions
Key Highlights
- The House Ways and Means Committee advanced the Digital Asset Tax Certainty Act in a 38-5 vote.
- The legislation would restore a 100% deduction for gambling losses up to the amount of gambling winnings.
- The proposal now awaits possible consideration by the full House after the November 2026 elections.
A new tax proposal on gambling losses could benefit American bettors when it comes time to file income taxes.
House Committee Moves Gambling Tax Fix Forward
On Sept. 16, the House Ways and Means Committee voted 38-5 in favor of advancing legislation for US gambling laws that would restore the full federal tax deduction for gambling losses. The provision was included in the Digital Asset Tax Certainty Act and received bipartisan support. If the bill becomes law, it would reverse a tax change that lowered the deductible amount of wagering losses to 90%.
The 90% limit was included in the One Big Beautiful Bill Act, signed by President Donald Trump on July 4, 2025. Under that rule, an individual reporting $100,000 in gambling winnings and $100,000 in losses could owe federal taxes on $10,000 despite breaking even. Critics describe the taxable amount as “phantom income,” noting the provision reversed decades of tax policy that meant gamblers only had to pay tax on net gains.
Nevada Lawmakers Push for a Full Deduction
Rep. Dina Titus, D-Nev., introduced the FAIR BET Act in July 2025 in an effort to restore the previous 100% deduction. Reps. Max Miller, R-Ohio, and Steven Horsford, D-Nev., later introduced the bipartisan FULL HOUSE Act, whose gambling tax language was ultimately incorporated into the legislation approved by the Ways and Means Committee. The provision would apply to taxable years beginning after Dec. 31, 2025.
The proposal would allow taxpayers to deduct gambling losses up to the amount of their winnings. The American Gaming Association and supporters across party lines have argued that gamblers shouldn’t owe federal income taxes on money they didn’t ultimately keep. Titus credited recreational gamblers for their support in advancing the bill.
“If it hadn’t been for the groundswell of people who enjoy gaming casually or professionally, we couldn’t have gotten this done,” said Titus, who has served in Congress since 2013.
What Happens Next in Congress
Committee approval sends the Digital Asset Tax Certainty Act to the full House, but the measure hasn’t become law. Titus called for House leadership to bring the legislation to a floor vote and move it toward the president before taxpayers begin filing returns affected by the current rules: “Let’s get it to the president so before the end of the year and before taxes have to be filed, this will be fixed, and you won’t be paying taxes on money that you don’t have,” she said in a video posted to social media on Wednesday.
If signed into law, the restoration of the 100% tax deduction on wagering losses would likely benefit a significant percentage of American bettors. A recent Bank of America Institute study revealed that on average players get back less than 75 cents for every $1 sent to online betting platforms.
A House vote isn’t expected immediately because lawmakers entered recess ahead of the Nov. 3 midterm elections. That leaves the post-election period as the next potential opportunity for consideration. Separate bipartisan legislation in the Senate also seeks to restore the full gambling loss deduction.
