An effort to restore the full federal tax deduction for gambling losses fell short in the U.S. Congress last week. The amendment, one of nearly 70 considered, failed to clear the House Rules Committee, leaving the gambling tax proposal off a must-pass spending bill.
The amendment would have restored the ability of gamblers to deduct 100% of losses on annual federal tax filings. The committee declined to advance the measure for inclusion in the Consolidated Appropriations Act, which passed the House on Thursday.
The proposal sought to reverse a tax change enacted last year under the One Big Beautiful Bill (OBBB) Act. That law limits deductions for gambling losses to 90%. Industry representatives and tax professionals have said the cap can result in taxable “phantom income” for bettors who break even over the course of a year.
The Las Vegas Review-Journal reported that US Rep. Dina Titus, D-Nev., appeared before the House Rules Committee on Wednesday to support adding the deduction language to the spending bill. Her proposal was considered alongside dozens of other amendments.
Gambling industry officials and tax advisers say the 90% limit affects professional gamblers and high-stakes players, who may owe taxes on earnings not realized. Poker players, high-limit slot players, and sports bettors are expected to face the most direct impact, according to experts.
In a statement issued Friday, Titus said she was “disappointed that the House Rules Committee has decided not to move forward with legislation to restore the full 100 percent deduction for gambling losses.”
“I led the charge to (restore the 100 percent deduction) with the FAIR BET Act I introduced last July after we discovered this tax on phantom winnings hidden in the OBBB,” Titus said. “I also have said from the very beginning that it doesn’t matter how this unfairness is rectified — it just needs to be fixed. It’s about righting a fundamental wrong that affects every person who gambles.”
The decision leaves the proposal without a legislative vehicle unless lawmakers include it in another must-pass bill later this year or advance it through standalone legislation.
Titus and other members of Nevada’s congressional delegation have said they plan to continue pursuing a change through future bills.
In the Senate, US Sens. Catherine Cortez Masto and Jackie Rosen, both Nevada Democrats, and US Sen. Ted Cruz, R-Texas, are co-sponsors of the FULL HOUSE Act, which would also restore the full deduction.
In December, Las Vegas casino executives representing several major operators and the gambling industry’s primary lobbying group met with US Rep. Jason Smith, R-Mo., chair of the House Ways and Means Committee, to advocate for reinstating the 100% deduction for gambling losses.
“There will be other opportunities this year to insert the language into another piece of legislation for consideration on the House floor,” Titus said. “I will pursue those opportunities until we get this done.”
Original article: https://www.yogonet.com/international/news/2026/01/26/117284-us-house-rejects-amendment-to-restore-full-deduction-for-gambling-losses
