Will Congress backpedal on change to gambling deductions?

Image via CD Davidson-Hiers/Florida Phoenix.

Some House members are slamming a Senate-driven change in how gamblers are taxed as a bad beat.

Within days of President Donald Trump signing the “Big Beautiful Bill” that exempts tips and overtime from taxes, U.S. Rep. Dina Titus filed legislation to restore a tax deduction that’s been reduced in the new law.

The Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act would restore a 100% deduction for gambling losses.

“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 percent to 90 percent the amount of losses they can deduct from gambling winnings for their income taxes,” Titus said.

“My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won.”

Titus co-chairs the Congressional Gaming Caucus.

The language cutting the deduction to 90% of losses was introduced to the tax bill in the Senate by U.S. Sen. Mike Crapo, an Idaho Republican who chairs the Senate Finance Committee. The move included no justification, and called for the change in levels to go into effect after Dec. 31.

The American Gaming Association in May sent a letter to the House Ways and Means Committee that said it was “critical to maintain this deduction.” While the group praised the tax package overall, the group issued a statement this week that it will work to pass Titus’ legislation.

“The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act,” reads the statement to Casino.org.

“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.”

While Titus and all other Democrats in the House voted against the tax package, Titus has announced bipartisan support for the bill. U.S. Rep. Troy Nehls, a Texas Republican who supported the overall tax package, is cosponsoring the bill.

Titus voiced optimism that the bill will garner broad support.

“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,” Titus said.

“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.”