Congress Targets Tax Loss Deductions in Trump’s New Tax Bill

A congresswoman from Nevada has introduced the FAIR Bet Act to restore 100% deductions for gambling losses that were lowered to 90% in Trump’s recent budget bill.

Titus Stands Up for Gamblers

Sometime in the middle of June, a clause to lower the tax deduction for gambling losses was lowered from 100% to 90% in President Trump’s Big Beautiful Bill. The reduction of the deduction from 100% to 90% outraged the gambling community, prompting a congresswoman from Nevada, a state known for gaming, to sponsor the FAIR Bet Act, which aims to restore the 100% deduction.

U.S. Representative Dina Titus from Nevada’s first district, which includes parts of Las Vegas, recently announced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act, which would restore the 100% deductions for gambling losses.

“The recently passed budget bill included a provision inserted by Senate Republicans without consent of the House that imposed a tax increase on Americans who gamble by reducing from 100 percent to 90 percent the amount of losses they can deduct from gambling winnings for their income taxes,” Titus said in a release. “My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won.”

The tax deduction reduction would take place in 2026 and is expected to raise $1.1 billion over eight years. However, Titus has responded with a counterpunch of her own and is co-sponsored by California Representative Ro Khanna, where the bill would advance to the House Ways and Means Committee.

Make Gaming Fair Again

The chief concern of legislators who oppose the tax rate deduction installed in President Trump’s bill is that it will discourage bettors from reporting losses and may eventually cause online sports bettors and casino gamblers to eschew the legal market in the United States for offshore shops or local bookies.

“This common-sense legislation will bring fairness back to gaming taxation, making sure that gamblers can fully deduct losses when they report their winnings,” Titus said. “It gives everyone — from recreational gamblers to high-stakes gamblers — a fair shake. We should be encouraging players to properly report their winnings and wager using legal operators. The Senate change will only push people to not report their winnings and to use unregulated platforms.”

The American Gaming Association, the trade and lobbying organization for gambling operators, initially supported the idea of a decrease in the tax reduction passage of Trump’s bill, but has also backed the efforts of Representative Titus.

“The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act,” the organization said in a statement. “We are committed to working with Congresswoman Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses.”

Titus is not alone in her criticism of the gambling passage, as evidenced by comments made by Indian Gaming Association chairperson Victor Rocha, who said, “The entire industry is freaking out. It will have an effect on tribes. There’s pain all the way across. I heard a gambler say, ‘We’ll just go offshore and won’t report it.’”