The U.S. House Ways and Means Committee will consider legislation on Wednesday, that would restore a 100% federal tax deduction for gambling losses against gambling winnings.
The proposal would eliminate the current 90% limitation on deductions for wagering losses and apply to taxable years beginning after Dec. 31, 2025, providing retroactive relief for 2026.
The gambling provision has been added to House Resolution 10357, the Digital Asset Tax Certainty Act, as part of a 98-page legislative package. The committee is also considering measures related to digital assets, healthcare and tax policy.
The provision is based on the bipartisan FULL HOUSE Act, or Facilitating Useful Loss Limitations to Help Our Unique Service Economy, introduced in January by Rep. Max Miller (R-Ohio). The bill is cosponsored by four Democrats and two Republicans, including Nevada Democrats Reps. Steven Horsford and Susie Lee.
“People should not pay taxes on money they never earned. That’s why I introduced the bipartisan FULL HOUSE Act and have worked for months to secure a full repeal of the unfair gambling tax that Senate Republicans enacted last year,” Horsford said.
“For Nevada, this is about protecting our economy and the workers and small businesses who depend on tourism and gaming. Their livelihoods are at stake,” he added.
Rep. Dina Titus, who has backed the similar FAIR BET Act, also welcomed the provision.
“Very pleased to see that my gambling loss tax deduction fix has finally been included in a tax package,” Titus said. “I encourage my Ways and Means colleagues to push it through this week as quickly as possible.”
Prediction markets have recorded more than $3.1 million in trades on contracts concerning whether the deduction will be restored, with traders implying a 48% chance that the 90% limitation will be repealed by April 1, 2027.
The legislative text states: “The proposal eliminates the 90% limitation on the deduction for losses from wagering transactions.”
It adds: “Accordingly, for taxable years beginning after December 31, 2025, losses sustained during the taxable year on wagering transactions are allowed as a deduction to the full extent of the gains during the taxable year from such transactions.”