Representative Dina Titus of Nevada has as soon as once more failed in her try and reinstate the complete playing loss deduction, this time by the annual National Defense Authorization Act (NDAA). The House Rules Committee, managed by Republicans, rejected her proposal to connect the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR Bet) Act to the 2026 protection spending bundle.
Titus’ Push to Restore Full Deduction Fails in Rules Committee
Titus, who represents Las Vegas, introduced in late August that she would search so as to add the measure to the Senate’s model of the NDAA. The objective was to undo a change launched below the Republican-led “One Big Beautiful Bill” (OBBA), signed by President Donald Trump earlier this 12 months, which limits playing loss deductions from 100% to 90% starting with the 2026 tax 12 months.
Under the brand new rule, if a gambler wins $100,000 but additionally loses an equal quantity, the person would nonetheless face a tax invoice on $10,000. “Unfortunately, the GOP-controlled Rules Committee did not accept the FAIR BET Act as an amendment to the NDAA. 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 wrote on X, previously Twitter.
For seventy years, U.S. taxpayers had been in a position to deduct playing losses totally in opposition to winnings. That modified when Republicans folded the revised deduction into OBBA. Critics argue the transfer unfairly penalizes gamblers by taxing “phantom income,” creating liabilities even when gamers break even.
The American Gaming Association (AGA) has additionally condemned the measure. Its president, Bill Miller, stated the coverage “creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity.” Supporters of repeal warn that the deduction minimize will push extra gamers towards offshore and unregulated playing platforms, undermining transparency and client protections.
The Joint Committee on Taxation has projected that limiting deductions to 90% will elevate about $1.1 billion in federal income over the following decade. Some lawmakers have admitted they have been unaware of the change when voting on the broader price range invoice. As reported by InGame, Senator Chuck Grassley of Iowa, a member of the Senate Finance Committee, advised reporters in July, “If you’re asking me how it got in there, no, I don’t know.”
Fallout for Gamblers and Operators
High-stakes gamblers have voiced issues that the change may make skilled play unviable. Casual bettors may be caught by the rule, as losses now not totally offset winnings. Titus has emphasised that encouraging gamers to report winnings by authorized operators is important, however warned the brand new construction may discourage compliance and drive exercise underground. She beforehand acknowledged the federal government “should be encouraging players to properly report their winnings and wager using legal operators,” reasonably than creating incentives to keep away from reporting.
The protection invoice itself authorizes $924.7 billion in spending, together with $878.7 billion for the Department of Defense, which Congress has newly renamed the Department of War. The NDAA frequently attracts unrelated amendments on account of its must-pass standing, however the Rules Committee declined to incorporate the FAIR Bet Act among the many a whole lot of amendments superior this 12 months.
This newest defeat marks the third setback for the FAIR Bet Act. Titus first filed the measure on July 7, sending it to the House Ways and Means Committee. She then sought so as to add it to the NDAA after her preliminary push failed. With the Rules Committee blocking the modification, the FAIR Bet Act stays pending in Ways and Means.
The invoice has drawn bipartisan backing, with 4 Republican and eight Democratic cosponsors. Committee Chair Jason Smith of Missouri has signaled willingness to look at the problem, acknowledging that Senate Republicans inserted the deduction become OBBA and agreeing the complete deduction needs to be restored.
For now, gamblers and business stakeholders should wait to see whether or not Congress will act earlier than the 2026 tax 12 months begins, when the 90% deduction takes impact. Titus has vowed to proceed urgent for change, arguing that equity for authorized playing requires restoring the deduction in full.
