A bipartisan measure seeking to repeal gambling tax loss deduction changes secured more sponsors but still faces political hurdles.
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Legislation to repeal a decreased deduction limit on gambling losses has two additional cosponsors, the bill’s original sponsor announced on social media Monday.
Key takeaways
- Bipartisan support grew for a repeal bill: Nevada Rep. Dina Titus announced two more cosponsors for her FAIR BET Act, which aims to repeal a new tax code change limiting gambling loss deductions.
- New tax rule sparks industry concerns: The recent “One Big Beautiful Bill” reduced deductible gambling losses from 100% to 90%, potentially increasing tax burdens for gamblers and prompting fears of migration to unregulated markets.
- The measure faces an uncertain path forward: Despite growing House support, the repeal effort has hurdles in both chambers.
Nevada Rep. Dina Titus said fellow Democratic Representatives Darren Soto of Florida and Chris Deluzio of Pennsylvania signed on as cosponsors on her FAIR BET act, which would repeal the deduction change included in the sweeping “One Big Beautiful Bill” Congress passed earlier this month. Along with Titus, the bill now has nine cosponsors, six Democrats and three Republicans.
🚨 FAIR BET Act update!@RepDeluzio and @RepDarrenSoto have signed on. I’ll keep pushing this bipartisan fix through Congress.
— Dina Titus (@repdinatitus) July 21, 2025
“I’ll keep pushing this bipartisan fix through Congress,” Titus wrote in an X post Monday.
HR 4304 is now in the powerful House Ways and Means Committee, which writes taxation and fiscal legislation. It isn’t currently scheduled for a vote.
Gambling deduction change background
The sweeping OBBB law encompassed immigration funding, foreign policy and a host of other issues. A provision included late in the legislative process alarmed the gambling industry.
The bill changed the U.S. tax code to limit the deductions a taxpayer can claim on gambling losses. Before the act, bettors could write off 100% of their gambling losses against their wins. The final OBBB reduced that to 90%.
A hypothetical gambler with $100,000 in gambling wins and $100,000 in losses wouldn’t pay taxes on that money under the prior structure. In 2026, a gambler with those same wins and losses could only deduct 90% of the losses, meaning they’d have to pay taxes on $10,000 of gross income.
The Big Beautiful Bill is supposed to generate $1.1 billion in extra tax revenue from gamblers.
It won’t.
And, here’s how they could generate $100+ billion instead. pic.twitter.com/KS3V8bb8Nl
— Phil Galfond (@PhilGalfond) July 4, 2025
Although this policy only affects a small subset of taxpayers who itemize their returns, the change triggered major concerns among gambling industry professionals and raised fears it could harm the industry overall. The increased taxes could drive away professional gamblers and move players of all earning levels to the black market.
The bill estimates the change will generate more than a billion dollars in new tax revenue for the federal government over the next decade. Opponents of the change argue that new revenue figure will be lower if gamblers turn to unregulated markets where they don’t have to pay taxes.
Repeal effort underway
Titus, whose district includes the south end of the Las Vegas Strip, led repeal efforts in the House. The bill continues to attract a wide range of politically and geographically diverse House members, but its passage is far from certain.
Though it has Republican cosponsors, the gambling loss change must still pass through the GOP-controlled House of Representatives that passed the bill. Republican leaders indicate they will consider “corrections” to the OBBB, but may not want to repeal a tax revenue generation measure they included in law that already cuts trillions in taxes.
Taxing “vice” industries such as gambling is also an increasingly popular revenue generation tool in statehouses across the U.S. Legislatures in Ohio, Illinois, Maryland, North Carolina and New Jersey are among those that enacted or considered sports betting tax increases in the past 12 months. Gambling tax hikes are seen as a potentially more politically palatable move as legislators face dwindling funding from the federal government.
At the federal level, the projected new gambling tax revenues will be overshadowed by the OBBB’s government spending cuts, analysts predict, leaving trillions in additional spending deficits. The billion dollars projected from the gambling loss deduction change is a minuscule fraction against that figure, but lawmakers may nevertheless be unmoved to repeal an already enacted new income generation source.
A companion effort to Titus’ FAIR BET Act already suffered political roadblocks in the Senate.
Nevada Sen. Catherine Cortez Masto unsuccessfully pushed for “unanimous consent” on restoring the 100% deduction earlier this month. That set the proposal back for consideration in the Senate while underscoring the political opposition that remains for the change.
Though members of both parties and both chambers questioned the need for the deduction decrease – and even how it was included in the final bill – it still has no guarantee to pass as a standalone bill or be included in other legislation before the scheduled Jan. 1, 2026 effective date.