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Congress Moves to Restore Full Gambling Loss Deduction After Surprise 90% Cut

The 90% deduction limit, inserted for budget rules compliance, takes effect in 2026 with repeal bids stalled on procedural grounds.

Players fill tables during the main event at the World Series of Poker in Las Vegas on Wednesday, July 6, 2022.
The High Roller Observation Wheel and the MSG (Madison Square Garden) Sphere lit up in blue are seen in Las Vegas, Nevada on July 3, 2025.
Customers play poker at Prime Social Poker Room in Houston.

Overview

  • The reconciliation bill signed in early July trims gamblers’ loss deductions to 90%, a change estimated to generate $1.1 billion over ten years.
  • Starting Jan. 1, 2026, professional bettors and high-volume gamblers will face potential taxes on unclaimed or “phantom” income.
  • Sen. Catherine Cortez Masto’s unanimous-consent effort to restore the 100% deduction was blocked by Sen. Todd Young’s procedural objection.
  • Rep. Dina Titus introduced the FAIR Bet Act in the House with bipartisan backing to reinstate full loss deductions.
  • Industry groups including DraftKings and the American Gaming Association are lobbying lawmakers to protect gaming patrons and preserve U.S. regulated markets.