U.S. Rep. Dina Titus (D-NV) on Monday introduced a bill to counter the gambling deduction limits in President Donald Trump’s “Big Beautiful Bill.”
The proposal, known as the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET Act), would restore the 100% allowance for gambling loss deductions on federal taxes. While that was standard in America, Trump’s new law lowered the amount to 90%.
The bill aligns with the fears of many professional gamblers and enthusiasts who feared that the change would make gambling unsustainable economically.
Restoring the previous standard
Trump's unpopular legislation was more than 1,000 pages long. It contained policy reforms to environmental programs, instituted tax cuts – mainly for high-earners – and slashed funding to government programs such as Medicare and Medicaid.
Lost in the weeds of the details was the change to gambling deductions. Titus told Legal Sports Report the move would adversely impact gambling states like Nevada.
“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% to 90% the amount of losses they can deduct from gambling winnings for their income taxes. My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won.”
Previously, Americans who won $10,000 and lost $10,000 for a net-zero profit in one year of gambling wouldn’t have to pay any gambling taxes.
Under the new legislation, they would be liable to pay taxes on 10% of the losses, or $1,000. That could result in anywhere from $100-$370 in tax payments based on the person’s income bracket, meaning they would have a losing year even if they broke even on the books.
Titus believes that making gambling an even less profitable endeavor goes against the integrity of the industry.
“This common-sense legislation will bring fairness back to gaming taxation, making sure that gamblers can fully deduct losses when they report their winnings. 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.”
Contradicting opinions
Gamblers have been able to deduct losses from their taxes since the 1934 Revenue Act was approved. The changes in Trump's legislation will go into effect in 2026 and are expected to raise $1.1 billion in tax funding in two presidential terms.
Titus is a key voice in the push to overrule the bill since she co-chairs the Congressional Gaming Caucus. She also has the support of California Rep. Ro Khanna who, despite his state not having legal sports betting, has special interest from gaming companies who are eager to break into the California market.
The FAIR BET Act will be sent to the House and Ways Committee.
Despite the implications for the gambling community from Trump's bill, the American Gaming Association said it supported it.
“Our industry’s ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of the One Big Beautiful Bill Act that supports consumers, encourages business innovation and investment, and strengthens US competitiveness.”
However, the group, which advocates for and regulates the gambling industry, also issued a statement supporting the FAIR BET Act.
“The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act. 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.”