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Nevada Representative Dina Titus, whose congressional district includes the Las Vegas Strip, is set to introduce legislation to repeal a controversial provision in President Trump’s “One, Big, Beautiful Bill” that would limit declarable losses for gamblers.
“On Monday (July 7), I’m introducing the FAIR BET Act – The Fair Accounting for Income Realized from Betting Earning Taxation Act – to permanently restore 100 percent loss deduction from gambling winnings,” Titus said after the budget reconciliation bill was signed into law on Friday.
The budget amendment to limit the ability of gamblers to deduct all losses from taxable winnings was reportedly introduced by Republican Senator Mike Crapo but only came to light last week after the U.S. Senate prepared to approve the budget bill.
The new provision to the tax code, which was tucked into the almost 900-page bill, limits the amount gamblers can deduct from their annual winnings to 90 percent of losses.
That means if a gambler won $100,000 during a trip to Atlantic City or Las Vegas but lost $100,000 gambling over the year, they would have to pay federal income taxes on $10,000 rather than the net amount of zero under the current tax code.
The Joint Tax Committee estimates the gambling tax change would result in $1.1bn in additional federal tax revenue over eight years.
The gambling tax code change goes into effect in 2026 and will not affect gamblers' tax returns for the 2025 tax year.
Currently, gamblers are allowed to deduct 100 percent of their losses from taxable gambling income, provided that number does not exceed their winnings.
According to the Internal Revenue Service (IRS), individuals are required to report all gambling winnings as taxable income, even those that do not trigger the filing of a W-2G form.
Commercial and tribal casinos, as well as sportsbooks, issue W-2G forms for gambling winnings of $1,200 or more from slot machines or bingo, or $5,000 or more from poker tournaments.
Titus and Republican Representative Guy Reschenthaler from Pennsylvania introduced legislation in March to update the nearly 50-year-old reporting threshold for slot machine winnings from $1,200 to $5,000 and indexing it to inflation. The reporting threshold has not increased since 1977.
The federal tax rate for gambling winnings is 24 percent.
Titus urged other members from both sides of the aisle in Congress to support a “common sense fix” that gets rid of the changes to loss deductions and fairly treats gaming losses in the tax code.
“Buried within this BS Republican budget bill is a provision that harms poker players and those who gamble by limiting loss deduction,” Titus added.
It is not clear how her forthcoming bill will be accepted in the Republican-controlled House of Representatives.
Analysts believe the tax code change punishes people properly reporting gaming on their taxes and could reduce overall activity in the legal market. That could have a direct effect on commercial and tribal casinos, horseracing, regulated iGaming and sports betting, hitting both professional and recreational gamblers.
“While there are many victories for the horse racing industry in the (bill), there is still work to be done to offset some losses by horseplayers in their ability to deduct tax losses,” Tom Rooney, president and CEO of the National Thoroughbred Racing Association (NTRA), said in a statement.
“The NTRA is committed to working on that fix moving forward,” Rooney added.
Titus expressed concern that the tax disadvantage would push gamblers into the black market, which does not pay taxes, is unregulated, and does not help with problem gambling.
“So it’s bad for the industry as well as for the player,” Titus said during an appearance on the cable news network NewsNation.
“The policy punishes people properly reporting gambling on taxes and gives them incentives to use offshore ‘outlets’ and prediction markets,” Titus added.
She also warned that tax revenues from gaming in Nevada would also take a hit and the tax change would result in fewer people gambling.
