A long-running effort to restore the full federal tax deduction for gambling losses failed on Capitol Hill this week.
The House Rules Committee declined to advance an amendment to a major spending bill that would restore a player’s ability to deduct 100 percent of losses on annual tax returns.
US Rep. Dina Titus, D-Nev., whose bipartisan FAIR BET Act would restore the full tax credit, pushed for a comparable proposal to be included in the consolidated appropriations bill, which passed the House on Thursday and has been sent to the Senate.
Under tax changes approved last year as part of the One Bill Beautiful Bill Act, players will be limited to deducting up to 90 percent, a change industry advocates warn will create taxable “phantom income” for players who break even.
Titus testified Wednesday before his congressional colleagues to add the deduction restoration proposal to the spending bill. Her amendment was one of nearly 70 considered.
The proposal’s failure effectively scuttles the effort unless lawmakers incorporate the reversal into another must-pass bill later this year.
In a statement 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.”
Gaming industry officials and tax professionals argue that the 90 percent deduction limit unfairly targets professional and high-stakes gamblers, who will now have to pay taxes on unrealized earnings. Poker players, high-limit slot players and sports players will be hit hardest, according to industry experts.
“I led the charge to (restore the deduction at 100 percent) with the FAIR BET Act that I introduced last July after we discovered this tax on phantom profits hidden in the OBBB,” Titus said. “I’ve also said from the beginning that it doesn’t matter how this injustice is fixed – it just needs to be fixed. It’s about fixing a fundamental wrong that affects every person who plays.”
Titus and other members of Nevada’s delegation say they plan to continue pushing the issue through future spending bills or standalone legislation.
U.S. Senators Catherine Cortez Masto and Jackie Rosen have also tried to restore the tax credit legislatively. The pair of Nevada Democrats and U.S. Sen. Ted Cruz, R-Texas, are co-sponsors of the FULL HOUSE Act in the upper chamber.
In December, several Las Vegas casino executives representing some of the biggest operators in the city and the gaming industry’s top lobbying group met with the US Rep. Jason Smith, R–Missouri, chairman of the House Ways and Means Committee, to push to restore the 100 percent deduction for gambling losses.
“There will be other opportunities this year to insert language into another bill for consideration on the House floor,” Titus said. “I will pursue these opportunities until we get this done.”
Contact David Danzis at ddanzis@ theplayerlounge.com or 702-383-0378. Follow @AC2Vegas_Danzis on X.
