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A proposal to restore the full federal tax deduction for gambling losses moved forward this week after clearing the House Ways and Means Committee.
According to TheLines, the provision backed by Rep. Dina Titus would reverse last year’s reduction in the deduction from 100% to 90%. Titus called it a “commonsense, bipartisan fix” and said the goal is to ensure gamblers do not pay tax on “phantom money they never won.”
What changed in the House committee
The measure advanced through the House Ways and Means Committee after what Titus described as “14 months of fighting.” The source article says the earlier tax change was included in Donald Trump’s One, Big, Beautiful Bill Act, which Titus characterized as a “ruse.”
If ultimately enacted, the change would restore the full deduction for gambling losses on federal returns. The source does not say when the restored 100% deduction would take effect, and it does not state whether the full House and Senate will approve it.
What the proposal means for bettors
The IRS treats gambling winnings as taxable regular income, while gambling losses can be deducted through a tax return. The article notes that sportsbooks and casinos must withhold a flat 24% federal income tax on qualifying wins, typically for lottery or sweepstakes prizes above $5,000, or when sports betting and casino payouts are 300 times the original stake or more.
That makes the deduction issue significant for players who itemize and report both winnings and losses. Under the current setup described by the source, the proposed fix would reverse the cut that reduced the deductible share of losses to 90%.
Operator backing and other gambling policy context
TheLines reports that DraftKings, MGM, FanDuel, and Caesars are among the prominent supporters of the change.
The same report also highlighted broader gambling policy developments in Nevada, including a 2.07% year-over-year increase in monthly gambling revenue to $1.39 billion and a Ninth Circuit ruling in the state’s favor against Kalshi in a prediction markets dispute. Those issues are separate from the tax proposal, but they underscore how active gambling policy debates remain at both the state and federal levels.
For now, the key unanswered question is whether Congress will carry the gambling-loss deduction fix beyond committee and into law.
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Source: As reported by thelines.com.
