AGA Wants Full Loss Deductions Restored for Gamblers

When it comes to taxes and gambling, things just got a bit more complicated. The American Gaming Association (AGA) is calling on Congress to rethink a rule that could cost players more than they expect—especially when it comes to reporting their gambling wins and losses.

Good to know

• The new law limits gambling loss deductions to 90%, even if you broke even for the year.
• The AGA supports keeping deductions equal to winnings, not less.
• President Trump signed the new rules into law under the 2026 budget plan.

The AGA recently sent a letter to the House Ways and Means Committee after the final budget bill was signed into law by President Donald Trump. In that letter, the AGA both thanked lawmakers for certain tax choices and raised concerns over a change in how gambling losses are handled.

Under the new rule, anyone who gambles legally and reports $100,000 in both winnings and losses would still owe taxes on $10,000. That is because the Senate capped gambling loss deductions at 90%, even though the House originally pushed for a full 100% deduction.

Bill Miller, the AGA’s President and CEO, made the organization’s position clear:

“We were gratified to see that the House passed bill included the 100% deduction for gambling losses, a 70-year bipartisan principle, that allows gamblers to deduct losses up to their winnings, a standard that was reaffirmed by the 2017 Tax Cuts and Jobs Act.”

He continued, “However, because of Senate procedural rules, this provision was changed to allow for only 90% limitation on gambling loss deductions. The result creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity.”

The 90% cap has now created a situation where someone who technically breaks even still ends up with a tax bill. The AGA wants to see that fixed—and soon. Miller emphasized the need for fairness and consistency, urging Congress to return to the full 100% deduction language originally supported by the House.

To be fair, the letter did not criticize everything. The AGA actually praised several parts of the 2026 budget legislation. They liked the continued 21% corporate tax rate, the return of 100% bonus depreciation, and provisions for R&D write-offs. The group also supported tax breaks for pass-through businesses, which include many small gambling-related operators.

But the focus remains on what they see as an unfair tax on “phantom” income. The AGA believes that no one should be paying taxes on money they never actually profited from. They are now hoping for quick action from lawmakers to adjust the rule and bring it back in line with previous standards.

For anyone who bets, whether with dollars or Bitcoin, this rule change matters. Even if you win and lose the same amount, you could still owe money at tax time. The AGA’s push highlights the importance of understanding how gambling and taxes connect—and how easily the balance can shift.

The post AGA Wants Full Loss Deductions Restored for Gamblers appeared first on iGaming.org.