House Panel Advances Bill to Restore Full Gambling-Loss Tax Deduction
The House Ways and Means Committee voted 38-5 on September 16 to advance a provision that would repeal the 90% cap on gambling-loss tax deductions and restore a full, dollar-for-dollar deduction against gambling winnings. The provision is folded into H.R. 10357, the Digital Asset Tax Certainty Act, and now moves toward a full House floor vote — though timing is uncertain, with House leadership not expected to schedule that vote until after the November midterm elections.
What the current rule is, and what would change
Under a cap enacted last year, gamblers can currently deduct only 90% of their losses against their winnings when filing federal taxes, meaning a bettor who wins and loses the same amount over a year can still owe tax on a net loss. The provision advanced this week would eliminate that 90% limitation entirely, restoring a full deduction up to the amount of winnings, and would apply retroactively to the 2026 tax year if it ultimately becomes law.
Who's behind it
The language traces back to the bipartisan FULL HOUSE Act, originally introduced by Rep. Max Miller (R-Ohio), with Nevada Democrats Rep. Steven Horsford and Rep. Susie Lee among its co-sponsors. Missouri Rep. Jason Smith introduced H.R. 10357 itself. Nevada Rep. Dina Titus, who has pushed a companion bill known as the FAIR BET Act since first raising the issue in July 2025, said of the fix: "You won't be paying taxes on money that you don't have." Rep. Horsford made a similar point, saying "people should not pay taxes on money they never earned."
Why it matters to a US bettor
The 90% cap has been a genuine pain point since it took effect, because it can create a tax bill even in years where a bettor's total losses roughly offset total winnings — a quirk that drew criticism from professional gamblers and casual bettors alike. A full repeal would remove that effect starting with 2026 returns if it clears both the House and Senate. The Joint Committee on Taxation estimates the repeal would reduce federal revenue by roughly $2 billion over ten years, a figure that will likely factor into how the bill is received once it reaches the floor. For now, this week's committee vote is a real step forward, but it's one of several still needed before anything changes for bettors filing their 2026 returns.