Efforts to Restore 100% Gambling Loss Deduction Face Senate Pushback
Opposition in the U.S. Senate has slowed attempts to restore the federal gambling loss deduction from 90% back to 100%, a change that has major implications for bettors and the wider gambling industry.
Key lawmakers remain divided over whether the reduced deduction should be reversed, even as industry groups and Nevada representatives push to undo the new rule.
⏳ 3 mins read
📖 Published: January 6th, 2026
✍️ Updated: January 6th, 2026
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Senate Opposition to Restoring Full Gambling Loss Deduction
Efforts to restore the gambling loss deduction to 100% have faced opposition in the Senate, dealing a blow to those seeking to reverse the recent change.
According to Punchbowl News, Sen. James Lankford (R-OK) believes the 90% cap is “a pretty minor change in the tax policy” and opposes a U-turn. Lankford is part of the Finance Committee, whose chair, Sen. Mike Crapo (R-ID), authored the provision, which was included in the One Big Beautiful Bill Act signed into law by President Trump in July.
Efforts to reverse the change have stalled so far. Rep. Dina Titus (D-NV) has been leading the charge through her Fair Accounting for Income Realized from Betting (FAIR BET) Act. She believes the reduction will drive people toward offshore and other unregulated gambling sites.
Gambling Industry Supports Titus’ Proposal
The House Committee on Ways and Means has taken no action since July, prompting Titus to send a letter in December requesting an expedited hearing. Major industry stakeholders, including the American Gaming Association (AGA), FanDuel, DraftKings, and the National Thoroughbred Racing Association, support the proposal.
Sen. Catherine Cortez Masto (D-NV), who is also a member of the Senate Finance Committee, introduced the Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act to counteract the 90% deduction cap. It was referred to the Senate Finance Committee in July, with no committee hearing or vote scheduled.
New Gambling Tax Rule and Its Impact on Bettors
The new tax rule reducing deductible gambling losses from 100% to 90% caused consternation among the gambling industry and bettors. The provision means players could be liable to pay taxes despite breaking even or even losing money gambling over the course of a year.
For example, if your total winnings for the 12 months were $50,000 and you also lost $50,000, you would be liable to pay taxes on 10% of your total winnings, or $5,000.
The federal government implemented the threshold change on January 1, 2026, so it’s now a reality for U.S. gamblers. The Joint Committee on Taxation estimates that the change could generate up to $1.1 billion in additional tax revenue over the next decade.
With the measure now in place and tax revenues set to increase, the 90% deduction doesn’t appear to be changing anytime soon.
