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The CEO of the American Gaming Association (AGA) reiterated his support for the restoration of the full gambling loss tax cap deduction as members of the House Committee on Ways and Means held a field hearing Friday (July 25) in Las Vegas on the One Big, Beautiful Bill.
The provision will allow gamblers to only deduct 90 percent of their losses. Players are currently allowed to subtract 100 percent of losses from their gains before paying taxes.
The House passed its version of H.R.1, also known as the One Big, Beautiful Bill, that included the 100 percent deduction for gambling losses, but the percentage was reduced in the Senate using procedural rules.
Gamblers have been able to deduct 100 percent of their gambling losses since 1934, a standard that was reaffirmed during President Donald Trump’s first term in the 2017 Tax Cuts and Jobs Act.
“The result creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity,” Bill Miller said in prepared remarks submitted to the committee.
The gambling tax code change goes into effect in 2026 and will not affect gamblers' tax returns for the 2025 tax year. The change is expected to bring in about $1.1bn more in revenue compared to continuing the current policy, according to Joint Committee on Taxation estimates.
“We encourage timely action to restore fairness and consistency in the tax code for American consumers and look forward to working with you to revert to the House language,” Miller said.
Ways and Means Committee chairman Jason Smith, a Republican from Missouri, blamed Senate Republicans for adding the gambling loss change to the bill at the last minute, which has prompted outrage from Miller and members of the Nevada Congressional delegation.
“I know here in Nevada, a change related to the deduction of gambling expresses has made some news,” Smith said in his opening remarks. “The version of The One, Big, Beautiful Bill that passed out of the Ways and Means Committee did not make any changes to the tax treatment of gambling losses.”
Smith said that the change was made by the Senate.
“That being said, for those of you concerned about this change, I can tell you that members on both sides of the aisle have heard you and I know that many members on both sides of the aisle are open to working to address it before it goes into effect on January 1.”
Following President Donald Trump signing the bill on July 4, Representative Dina Titus, a Democrat from Nevada, introduced the Fair Accounting for Income Realized from Betting Earning Taxation (FAIR BET) Act that would restore the 100 percent deduction.
Her legislation has bipartisan support with ten cosponsors. H.R. 4304 has been referred to the Ways and Means Committee.
Titus, who is not a member of the committee, was asked to join the panel because the hearing tool was placed at YESCO Sign Company, which is in her district.
The committee heard testimony from a restaurant server, a DoorDash driver, a retired hospital and hospice volunteer, an employee of YESCO and others, mostly on how they would benefit from not taxing tips, a campaign promise Trump first made in Las Vegas.
“I’m very glad to hear the chairman say he’d work with us to undo the reduction in the deductions for gaming losses,” said Titus, who is co-chair of the Congressional Gaming Caucus. “The Senate did put it in there, but it came back to the House. They wouldn’t accept any amendments, and they all voted for it.”
Representative Steven Horsford, a Democrat from Nevada, opened his comments by asking for Smith’s commitment to supporting the FAIR BET Act.
Smith said they’ll look at “avenues to continue to address the problem the Senate created.”
AGA’s Support For One Big, Beautiful Bill
While voicing support for restoring the full gambling loss deduction, Miller wrote they the gaming industry was grateful for the committee’s leadership in advancing the positive tax policies included in the One Big Beautiful Bill.
Miller noted that maintaining the 21 percent corporate tax rate and the Section 199A deduction for pass-through businesses provides stability for operators large and small, while the restoration of 100 percent bonus depreciation and research and development will support investment and innovation.
“We are also celebrating the modernization of tax thresholds, something the industry has been trying to achieve for decades,” Miller wrote. “The new reporting threshold of $2,000 for slot winnings will mean less compliance burdens for our patrons and operators, while also eliminating unnecessary paperwork for the Internal Revenue Service.”
The decision to increase the threshold will undergo regulatory rulemaking at the U.S. Department of the Treasury before a final version is added to the U.S. tax code.
An increase to $2,000 would be effective for payments made after December 31, 2025. For the years 2026 and beyond, the threshold amount will be increased in line with inflation, according to Section 70433 of the tax bill.
That increase will be calculated by multiplying the current amount by the cost-of-living adjustment determined under the act for each calendar year and rounding to the nearest multiple of $100.
