Gambling Loss Deduction Bill Still Awaits Congressional Action

The gambling loss tax deduction issue remains unsettled in Congress as the House of Representatives returns to its regular calendar. The measure aimed at restoring a full deduction for gambling losses has not advanced despite support from members of both major parties.

Good to Know

• Deduction is set to fall from 100 percent to a 90 percent cap
• Two separate House bills seek full restoration
• Industry analysts warn of economic consequences for casinos and sportsbooks

Legislation Remains Idle After Extended Shutdown

The recent shutdown prevented movement on several tax matters, including the proposal to reverse changes affecting gamblers who itemize their returns. The House now faces limited time before year-end recess periods, and multiple priority bills compete for consideration.

During the shutdown, Rep. Morgan McGarvey and Rep. Nick LaLota added their names to the list of co-sponsors, bringing the total to twenty. Supporters from the gaming sector and within Congress continue to express confidence that a fix can still pass.

How The Deduction Change Works

Under current rules for the 2025 tax year, gamblers may deduct only 90 percent of their losses. In practice, a taxpayer who wins 100,000 dollars and loses the same amount would be taxed on 10,000 dollars of income that was never received.

This adjustment was included in the One Big Beautiful Bill. Several members of Congress later said the provision appeared unexpectedly in the final Senate version and stated that they would support legislation to reinstate the full deduction.

Two House bills seek to do that. One was introduced by Rep. Dina Titus and another by Rep. Andy Barr. Neither has been scheduled for a vote.

Procedural Barriers Continue To Slow Progress

Rep. Jason Smith, chair of the House committee responsible for reviewing the bills, has expressed support for restoring the deduction. However, any measure must clear committee review, move to the full House and pass the Senate. Fewer than eight weeks remain for that process.

A companion bill in the Senate remains at a standstill, adding another obstacle to timely passage.

Industry Is Concernced Over Potential Effects

Analysts warn that regulated casinos and sportsbooks could face substantial financial pressure if the deduction is not restored. Only a small number of taxpayers itemize gambling losses, yet those individuals tend to wager at higher volumes. Their activity contributes to liquidity that operators rely upon for sports betting and casino gaming.

Industry groups argue that reducing the deduction will discourage high-value wagering and weaken the regulated market at a time when legal operators face rising tax burdens and increasing competition from unregulated channels.

FAQ

What change is scheduled for 2025?

The deduction for gambling losses drops to a 90 percent limit.

Why is the change controversial?

Gamblers may be taxed on income they did not earn when the deduction cap applies.

How many lawmakers support restoration?

Twenty House members currently co-sponsor the fix.

Which lawmakers introduced restoration bills?

Rep. Dina Titus and Rep. Andy Barr each introduced a version.

What is the main concern for the gaming industry?

Reduced liquidity and potential billions in economic losses if high-volume bettors pull back.

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