Could the 100% Gambling Tax Deduction Finally Be Restored?

_{U.S. Rep. Dina Titus from Nevada has rallied voters in Congress towards blocking the reduction in gambling losses tax deduction. (Photo: The Photo Access / Alamy Live News)}

Gamblers in the United States got a bit of good news on Wednesday, as the House Ways and Means Committee overwhelmingly voted in favor of legislation that would restore the 100% deduction on gambling losses before the 2026 taxes are due next spring.

The provision was folded into the Digital Asset Tax Certainty Act passed in committee by a 38-5 margin, and included a provision that would block the reduction in the gambling losses deduction to 90% from going into effect on Jan. 1, 2027. The FULL HOUSE Act is built into the act and would block the reduction in the gambling losses deduction to 90% from taking effect on Jan. 1, 2027.

Titus Calls for Quick Action on Tax Fix

The language that passed committee comes from the FULL HOUSE Act, co-sponsored by Rep. Steven Horsford (D-Nevada) and Rep. Max Miller (R-Ohio). Supporters of the bill included Rep. Dina Titus (D-Nevada), who has been one of the leading proponents for restoring the full deduction in the tax code. Though her bill, the FAIR BET Act, isn't the one that advanced on Wednesday, she still celebrated the committee's action and pushed for quick follow-through.

“Let’s take it to the floor,” Titus said on social media. “Let’s vote on it. And let’s get it to the president so before the end of the year and before taxes have to be filed, this will be fixed, and you won’t be paying taxes on money that you don’t have.”

Titus’ statement refers to the widespread concern among gamblers about the consequences of the tax change that was included in the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025. Before that legislation, gamblers could deduct all of their losses – up to the amount of any gambling wins they enjoyed in the same year – from their taxes.

However, the OBBBA included a provision limiting the deduction to 90% of losses. That made it likely that many gamblers would end up owing more in taxes than they actually won, and that other gamblers who broke even or lost money would end up owing payments even though they hadn’t made any income in a given year. For instance, a gambler who had both $10,000 in wins and $10,000 in losses would break even for the year, but would still owe taxes on $1,000 in winnings due to the 90% cap on deductions.

Restoring the full deduction isn't free, though. Repealing the 90% cap is projected to reduce federal tax revenue by roughly $2 billion over the 10-year period from 2027 through 2036, according to estimates from the Joint Committee on Taxation.

The overwhelming nature of the committee vote suggests that the bill will likely have strong support in the House as a whole. However, there are still significant obstacles that could prevent the legislation from taking effect in time for the 2027 tax season.

House Recess Leaves Tight Window for 2026 Passage

For starters, it will be months before House members get a chance to vote on the bill. House Speaker Mike Johnson canceled a series of votes that were planned for Thursday, instead sending members home on a recess for over six weeks, until after the midterm elections in November.

Many pundits believe Johnson made the tactical move to avoid controversial votes that would have divided Republicans – or put vulnerable GOP members in difficult positions – including articles of impeachment against Defense Secretary Pete Hegseth brought by Rep. Thomas Massie (R-Kentucky). But it will also table other business for the time being, including the Digital Asset Tax Certainty Act.

The recess doesn’t rule out the possibility that the House could return to vote on some high-profile bills. But that’s only likely to happen if the Senate passes similar bills first, and there hasn’t been any movement on a companion to the cryptocurrency tax legislation.

“If the Senate works together and moves some of these important pieces of legislation, I will bring the House back on 48 hours’ notice,” Johnson told reporters.

Earlier this week, the Senate failed to pass a procedural vote on its own cryptocurrency legislation, known as the Clarity Act, largely due to ethics concerns tied to the significant cryptocurrency gains made by President Donald Trump and his family during his current administration. However, Senators could still pick up the House’s alternative bill if it proves more palatable to legislators.

“Given the House is expected to go on recess, this will likely be taken up during the lame duck period,” Crypto Council for Innovation Chief Strategy Officer Alison Mangiero told The Block. “Following today, attention will turn to the Senate Finance Committee, which has also expressed interest in advancing digital asset tax legislation.”

The wording of any such Senate version would also be important to gamblers. Given that the bulk of the bill addresses how cryptocurrency-related income will be taxed, the legislation could be passed without any gambling-related provisions. Any differences between potential House and Senate bills would need to be ironed out via a Conference Committee, after which both chambers would have to pass the final, identical bill.

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