Republicans reduced the tax deduction for gambling losses from 100% to 90% in the budget reconciliation package known as the “Big Beautiful Bill.” Now, they want to change it back, due to concerns that it will harm the casino industry and punish gamblers for “phantom” income.
The lower deduction is set to take effect Jan. 1, 2026, but some lawmakers want to rescind the measure now. Lawmakers, specifically those representing Nevada, have introduced bipartisan bills to increase the deduction back up to 100%.
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There are a total of 16 co-sponsors in the House and Senate, including seven Republicans and nine Democrats.
Paying taxes on lost money?
Why do gamblers get to write off their losses? Isn’t that part of the risk? Well, according to professional bettor Rufus Peabody, someone can lose money gambling and still owe taxes on it.
He gave this example:
If over the course of a year someone wins $200,000 but loses $210,000, that would be a net loss of $10,000. However, with the new 90% deduction, they’d only be able to deduct $189,000 of those losses, for a taxable income of $11,000, even though they lost $10,000.
Professional gambler Phil Galford said in a video posted on X that the new law makes being a professional “completely untenable.”
“You can’t be a professional gambler in the U.S. if this goes through,” Galford added.
Bipartisan push
“It’s now time for both chambers to unite behind my bipartisan FAIR BET Act to ensure that average and high-stakes gamblers do not pay taxes on money they never won,” Rep. Dina Titus, D-Nev., said in a statement. “If we do not do this, more gamblers will move to unregulated and untaxed offshore markets; more gamblers will not report winnings; and revenue and jobs will be lost, not just in Las Vegas, but across the nation.”
Nevada’s senators tried to get this bill through their chamber via unanimous consent, but the effort failed after an objection was raised.
Now they’ll have to get it approved the old-fashioned way –– by voting. That will be a much more difficult and time-consuming process. Whether or not they get it done in time, that’s a tough bet.
