U.S. House panel blocks FAIR BET Act to restore full gambling loss deduction

A U.S. House committee has rejected a proposal from Nevada Democrat Rep. Dina Titus to restore the full federal tax deduction for gambling losses, leaving in place a cap introduced under the Trump administration.

The Republican-controlled House Rules Committee this week blocked Titus’s Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET Act) from being added as an amendment to the National Defense Authorization Act (NDAA). The bill would have reversed a change in the 2017 Tax Cuts and Jobs Act that reduced the gambling-loss deduction from 100% to 90%, a measure projected to raise $1.1 billion over eight years.

The limit means gamblers can face tax liability even when overall losses exceed winnings. For example, someone who wins $10,000 but loses $12,000 can deduct only $10,000.

“Unfortunately, the GOP-controlled Rules Committee did not accept the FAIR BET Act as an amendment to the NDAA,” Titus said in a post on X. “This was an easy fix that should have been adopted. Nonetheless, I will continue to build support to restore the 100% gambling loss deduction.”

Titus introduced the FAIR BET Act in July and sought to advance it as part of the defense bill in August. She said she intends to keep pressing for the change in upcoming tax debates, particularly in 2026 when key provisions of the 2017 tax law are set to expire.

Other lawmakers have filed similar measures, including Kentucky Republican Andy Barr with the WAGER Act and Nevada Democratic Senator Catherine Cortez Masto with the FULL HOUSE Act, though neither has advanced.

Republicans defend the 90% cap as a safeguard for federal revenue, while some conservative groups argue that gambling losses should not be deductible at all. The American Gaming Association and other industry groups back restoring the full deduction, saying it ensures fair treatment for recreational and professional gamblers.

Titus has also renewed her push to repeal the federal sports betting excise tax, which has been in place since 1951. “The Discriminatory Gaming Tax Repeal Act of 2025 repeals a tax that does nothing except penalise legal gaming operators for creating thousands of jobs in Nevada and 37 other states around the nation,” she said when introducing the bill.

“Illegal sportsbooks do not pay the .25% sports handle tax and the accompanying $50 per head tax on sportsbook employees, giving them an unfair advantage,” she added. “I once asked the IRS where the revenue from the handle tax went in the federal budget and they didn’t even know.”