House Committee Votes 38-5 to Restore the Full Gambling-Loss Deduction

Fourteen months after the "Big Beautiful Bill" cut deductible losses to 90%, the Ways and Means Committee has attached the fix to a crypto tax bill and sent it to the floor. It still needs the House, the Senate and the President before 1 January, and the House is about to leave town.

• The House Ways and Means Committee approved H.R. 10357, the Digital Asset Tax Certainty Act, by 38 votes to 5 on Wednesday, with a provision restoring the deduction of gambling losses to 100% of winnings, according to Focus Gaming News and the Las Vegas Review-Journal
• The provision reverses the 90% limit enacted in the One Big Beautiful Bill Act of July 2025, under which a gambler who wins $1 million and loses $1 million would be taxed on $100,000 of income never received
• Nevada's Steven Horsford, whose FULL HOUSE Act with Ohio Republican Max Miller supplied the language, said "no one should pay taxes on money they never earned"; Dina Titus, who has fought the change since a July 2025 field hearing, said the House must act "before Jan. 1, 2027"
• The American Gaming Association's Bill Miller called it "a critical step forward" and urged Congress to pass the measure "to ensure that consumers choose the legal market where protections exist and are not taxed on phantom income"
• The House is out of session until after the November election, and the bill would still need the Senate, where Catherine Cortez Masto, Jacky Rosen and Ted Cruz have a companion, and the President's signature

A Fix That Finally Found a Vehicle

The House Ways and Means Committee on Wednesday, 16 September, advanced a bipartisan tax package that would reinstate the full federal deduction of gambling losses, clearing it by 38 votes to 5 and sending it to the House floor, Focus Gaming News reports. The package is H.R. 10357, the Digital Asset Tax Certainty Act, a 114-page bill on the taxation of digital assets, and the gambling provision rides inside it. The Review-Journal reports that Representative Dina Titus's FAIR BET Act, H.R. 4304, was attached to the digital-asset bill for the markup; Focus and the American Gaming Association describe the operative text as the FULL HOUSE Act of Representatives Steven Horsford, a Nevada Democrat, and Max Miller, an Ohio Republican.

The provision the committee voted to repeal was inserted into the One Big Beautiful Bill Act, signed on 4 July 2025, and limits the deduction of gambling losses to 90% of the amount that would otherwise be deductible. The arithmetic the industry has campaigned on is simple: a gambler who wins $1 million and loses $1 million may deduct only $900,000, and pays tax on $100,000 of income that never existed. Titus said the change "was a ruse in the One, Big, Beautiful Bill at the expense of recreational and professional gamblers", and that the committee's action "would stop the reduction to 90 percent from taking effect and ensure gamblers across the nation do not pay this tax on phantom money they never won", according to the Review-Journal.

Horsford framed it as a Nevada jobs measure. "From dealers and housekeepers to restaurant workers and small business owners, families across our state depend on visitors choosing Nevada," he said in a release quoted by Focus. "This unfair tax puts their livelihoods at risk." AGA president Bill Miller said the association was "grateful for this critical step forward in restoring the 100 per cent gambling tax deduction" and thanked the committee and Representatives Horsford and Miller. The FAIR BET Act has 25 co-sponsors and the backing of the AGA, MGM Resorts, Caesars, Wynn, DraftKings, FanDuel, the Nevada Resort Association and the National Thoroughbred Racing Association, the Review-Journal reports.

The Clock the Bill Is Racing

Titus was not gracious about the timing. "I am disappointed it took the House committee so long to take action," she said. "I spoke at a Ways and Means committee field hearing in Las Vegas in July 2025 to bring the consequences of reducing the deduction to their attention. Over the next several months, I wrote letters to the committee urging it to include the fix in an upcoming package. Nothing happened until now, when the House will be out of session until after the election." Her previous attempt, an amendment to an appropriations bill, was not advanced by the Rules Committee in January.

The provision must now pass the full House, then the Senate, where Nevada's Democratic senators Catherine Cortez Masto and Jacky Rosen have co-sponsored a companion FULL HOUSE Act with Texas Republican Ted Cruz, and then be signed by the President, all before the 90% limit takes effect for the 2026 tax year on 1 January 2027.

Riding a Crypto Bill Is the Best Chance This Provision Has Had, and It Is Still Not a Good One

A standalone gambling-tax fix has never had floor time and never will; the industry's lobbying has been aimed at finding a vehicle, and a bipartisan digital-asset bill that cleared committee 38-5 is the best one available. It is also a bill whose fate belongs to the crypto industry's politics, in a Congress that rejected the crypto market-structure bill in the Senate on Tuesday. The gambling provision is a passenger. If the Senate treats a House tax bill the way it treated CLARITY, the deduction goes down with it, and the House, as Titus notes, has left for the campaign.

The Channelisation Argument Has Reached the Tax Code

Bill Miller's statement does not say the tax is unfair; it says consumers must "choose the legal market where protections exist". That is the industry's argument for everything, from prediction markets to tax, and here it is unusually strong, because a tax on phantom income is paid only by people who report their gambling, which is to say people who gamble with licensed operators that issue tax forms. An offshore book issues nothing. The 90% rule, whatever its drafters intended, is a specific incentive to bet where the IRS cannot see, and the AGA has been quick to say so. The Treasury's counter, that the provision raises revenue, is true only of the revenue it can find.

Nevada Has Made This Its Delegation's Issue, and That Is Both the Strength and the Limit

Titus, Horsford, Cortez Masto and Rosen are all Nevadans; Cruz and Max Miller are the bipartisan cover. A provision that reads as a Las Vegas carve-out will struggle in a Senate that has other priorities in a lame-duck session, and the industry knows it, which is why the AGA's framing is national and consumer-facing. The 38-5 margin says the committee has no appetite to defend the 90% rule on the merits. Whether anyone has the appetite to spend floor time repealing it before January is the only question that matters now.

The gamblers' tax has been marked up, and it has a vehicle. What it does not yet have is a calendar.