House committee rejects FAIR BET Act proposal to fix the new tax hit faced by gamblers

The House Rules Committee this week blocked Nevada Rep Dina Titus’s latest effort to restore gambling loss tax deductions to 100%.

Titus, a Democrat, first proposed the Fair Accounting for Income Realized from Betting Earnings Taxation Act (FAIR BET Act) after the Trump administration’s most recent budget reduced gambling loss deductions from 100% to 90%. Titus introduced the initial bill in July, where it remains pending in the House Ways and Means Committee.

In August, she proposed adding the FAIR Bet Act as an amendment to the National Defense Authorization Act, but the Republican-controlled Rules Committee rejected the effort on Tuesday. The bill would simply remove the 90% cap and restore a full 100% deduction in the Internal Revenue Code.

Titus tweeted about the situation, but her office declined further comment on Tuesday.

“Unfortunately, the GOP-controlled Rules Committee did not accept the FAIR BET Act as an amendment to the NDAA,” Titus posted. “This was an easy fix that should have been adopted. Nonetheless, I will continue to build support to restore the 100% gambling loss deduction.”

With similar goals to the FAIR BET Act, Kentucky Republican Rep Andy Barr filed the Winnings and Gains Expense Restoration Act (WAGER Act) in July. Nevada Democratic Senator Catherine Cortez Masto introduced the Facilitating Unbiased Loss Limitations to Help Our Unique Service Economy Act (FULL HOUSE Act). No action has been taken on those.

Gambling loss deduction battle

During the process to pass President Donald Trump’s One Big Beautiful Bill, the gambling loss deduction change emerged in the Senate Finance Committee, chaired by Idaho Senator Mike Crapo. Dropping the figure from 100% to 90% means a gambler could owe taxes even if their losses offset their winnings. Legislative estimates suggest the change could generate $1.1 billion in tax revenue over the next eight years.

Titus attempted to amend the bill to remove the tax change when it arrived in the House, but the bill passed without amendments. Trump signed it into law on 4 July, with the tax change set to take effect in 2026.

Republican Senators Chuck Grassley and John Cornyn, both on the Senate Finance Committee, told reporters after the budget passed that they were unaware the deduction change was included.

Titus not new to gambling tax bills

The FAIR BET Act is not Titus’s first foray into tax bills related to gambling. She has championed efforts to repeal the federal sports betting excise tax since 2014. The tax, in effect since 1951, levies a 0.25% tax on all sports wagers made in the US.

“The Discriminatory Gaming Tax Repeal Act of 2025 repeals a tax that does nothing except penalise legal gaming operators for creating thousands of jobs in Nevada and 37 other states around the nation,” Titus said when she introduced the bill this year. “Illegal sportsbooks do not pay the .25% sports handle tax and the accompanying $50 per head tax on sportsbook employees, giving them an unfair advantage.

“I once asked the IRS where the revenue from the handle tax went in the federal budget and they didn’t even know. It makes no sense to give the illegal market an edge over legal sportsbooks with a tax the federal government does not even track.”

Titus has also pushed back on prediction markets.