Lawmakers Advanced Gambling Tax Deduction Fix

A House committee approved a proposal to restore the full 100% federal tax deduction for gambling losses.

Updated on Oct. 12, 2026 in Gambling

Lawmakers Advanced Gambling Tax Deduction Fix

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Should federal tax law allow taxpayers to fully deduct their gambling losses against their winnings?

On September 16, 2026, the House Ways and Means Committee voted 38-5 to approve a tax package that includes a provision to restore the full federal tax deduction for gambling losses. This move seeks to address current rules that limit deductions to 90% of losses starting in the 2026 tax year.

Why it matters

The legislation is designed to eliminate tax liability for gamblers who break even, as current rules can result in taxable income despite no net profit. Supporters argue that the change is necessary to protect the livelihoods of gaming industry workers and businesses.

Current regulations limit gambling loss deductions to 90%, leaving taxpayers with a $1,000 tax liability when they break even on $10,000 in winnings and losses. Over two dozen lawmakers have supported versions of the proposal to return the deduction to 100%.

The players

President Donald Trump

The current President of the United States who signed the legislation establishing the 90% deduction limit in 2025.

House Ways and Means Committee

The congressional committee responsible for overseeing federal tax legislation and revenue-raising measures.

The details

Under the One Big Beautiful Bill signed by President Donald Trump in July 2025, taxpayers were limited to deducting only 90% of gambling losses. The newly proposed legislation, supported by the FAIR BET Act and the FULL HOUSE Act, would reverse this limit to ensure fair taxation for gamblers.

July 2025: President Donald Trump signed the One Big Beautiful Bill.
July 2025: The FAIR BET Act was introduced.
September 16, 2026: The House Ways and Means Committee voted 38-5 to approve the tax package.
2026 tax year: The 90% loss deduction limit currently applies.

Culture Shift

This effort to restore full tax deductions highlights the ongoing tension between federal revenue policies and the financial realities of professional and recreational gamblers. It reflects a broader push by industry advocates to normalize gambling taxation relative to other business-related income and losses.

For residents in Nevada and regular gamblers, this policy change would eliminate the tax burden on those who finish a year with even winnings and losses. It ensures that bettors are not penalized by having to pay taxes on money they did not actually profit from.

The takeaway

If passed, this change will simplify tax filings for frequent gamblers who currently face complex reporting requirements. Readers should monitor future legislative sessions to see if these tax adjustments are finalized before the next filing deadline.