FAIR BET to fight 90 per cent limit on deductibility of gambling losses will come into play on January 1, 2026
Congresswoman Dina Titus has sent a letter to the Chairman of the House Ways and Means Committee asking him to expedite a hearing for the Fair Accounting for Income from Betting Earnings and Taxation (FAIR BET) Act to fully restore the 100 per cent income tax deduction for gambling losses.
The Senate version of the One Big Beautiful Bill Act passed in July reduced the amount of gambling losses gamblers could deduct from their taxes from 100 per cent to 90 per cent, in effect taxing gamblers on money they did not win. The 90 per cent limit on deductibility of gambling losses will come into play on January 1, 2026. It would see a gambler who wins $100,000 in a tax year while also losing $100,000, needing to pay taxes on $10,000, despite breaking even on a cash basis.
Paying taxes on so-called ‘phantom’ winnings will put off both professional and recreational gamblers from taking part.
“While the change may appear minor, it will have significant and harmful consequences,” Rep. Titus said in her letter to Rep. Jason Smith, Chairman of the House Way and Means Committee, and Rep. Richard Neal, the Democratic Ranking Member of the Committee. “It unfairly burdens professional gamblers and casual players alike and will inevitably drive players toward offshore and unregulated markets where consumer protections are non-existent, thereby undermining responsible gaming efforts nationwide.”
Rep. Titus asked Chairman Smith to consider the FAIR BET Act at its next committee meeting. “I hope that you will work with me to move this legislation expeditiously during the 119th Congress,” she said.
Rep. Titus introduced the FAIR BET Act on 7 July as the first piece of legislation to repeal the reduction in gambling loss deductions. Since then, it has attracted strong and bipartisan support from 21 co-sponsors and backing from the American Gaming Association, MGM, Draft Kings, FanDuel, Caesars, Wynn, the Nevada Resort Association, and the National Thoroughbred Racing Association. In addition, there has been an outpouring of support for the legislation by gamblers on social media.
The Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act, to give it its full name, would restore the ability for bettors to deduct 100 per cent of their annual losses against their gains.
Titus, a Democrat who said the betting provision was added to OBBA “by Senate Republicans without consent of the House,” brought on Rep. Ro Khanna from California to co-sponsor FAIR BET.
“My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won. 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. 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.”
“It pushes people into the black market if they don’t do regulated gaming because they have a tax disadvantage. The black market doesn’t pay taxes, isn’t regulated, doesn’t help with problem gaming, so it’s bad for the industry, as well as for the player.”
CBRE Equity Research analyst John DeCree commented: “This could create phantom income for some high-volume gamblers that even breakeven or lose money in a given year, such as poker players and sports bettors. Although this customer cohort isn’t particularly profitable for the industry given the relatively low win margins, recreational players could also see higher tax liabilities and reduced betting volumes.”
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FAIR BET to fight 90 per cent limit on deductibility of gambling losses will come into play on January 1, 2026 Congresswoman Dina Titus has sent a letter to the Chairman of the House Ways and Means Committee asking him to expedite a hearing for the Fair Accounting for Income from Betting Earnings and Taxation…
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