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A US House committee has backed legislation that would restore the full federal gambling loss tax deduction before the new 90% limit affects 2026 tax filings.
Good to Know
- The House Ways and Means Committee approved H.R. 10357 by 38 votes to 5 on September 16.
- Current IRS rules limit the 2026 gambling loss deduction to 90% of losses or total gambling winnings, whichever is lower.
- Reversing the limit would reduce federal revenue by about $2 billion from 2027 through 2036.
Gambling Tax Deduction Repeal Clears Committee
The fight over the US gambling loss tax deduction has reached the House floor process after the Ways and Means Committee approved the Digital Asset Tax Certainty Act.
H.R. 10357 contains language that would remove the 90% gambling loss deduction cap created under the One Big Beautiful Bill Act. Missouri Rep. Jason Smith introduced the wider tax bill, which mainly deals with digital asset taxation.
Without a repeal, a gambler with $100,000 in winnings and $100,000 in losses could deduct only $90,000 in losses for federal tax purposes. The IRS confirms that the restriction applies from the 2026 tax year.
A successful repeal would restore deductions up to the amount of gambling winnings and apply to tax years beginning after December 31, 2025.
Nevada Rep. Dina Titus has spent more than a year seeking to reverse the change.
“Our office was the first to detect this problem. We introduced legislation to fix it,” Titus said. “We’ve been sending letters, testifying, going to the IRS, lobbying our fellow members, helping get the delegation on board and get this done.
“Now let’s get it to the floor, vote on it, and get it to the President, so by the end of the year, and before taxes have to be filed, this will be fixed.”
Titus also said the change would affect both recreational bettors and professional gamblers.
“You won’t be paying taxes on money that you don’t have,” Titus said. “For gamblers, whether you’re a weekend sports bettor or a professional poker player, this will work to help you not pay taxes that you don’t owe.”
Finally, after 14 months of uncertainty, my fix to restore the 100% tax deduction for gambling losses has been passed out of committee.
I was the first Member of Congress to recognize this injustice when I introduced my provision to correct it on July 7, 2025. Since then, I have… pic.twitter.com/TOMud2inaf
— Dina Titus (@repdinatitus) September 16, 2026
House And Senate Approval Still Required
Committee approval does not change federal gambling tax law yet. H.R. 10357 still requires approval from the full House and Senate before it can reach President Donald Trump.
The House calendar could delay the next vote until after the November midterm elections.
The Joint Committee on Taxation estimates that removing the 90% limit would cut federal revenue by around $2 billion over the 2027 to 2036 period.
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