A recent tax and spending bill, dubbed the “big beautiful bill” by President Trump, has sparked significant controversy regarding its impact on gambling taxation. A provision within the 900-page legislation reduces the tax deductibility of gambling losses from 100% to 90%, effective in 2026. This alteration has drawn fierce opposition from both Democrats and professional gamblers.
The Senate recently witnessed a failed attempt to overturn this controversial amendment. Republicans successfully blocked a bipartisan effort spearheaded by Senator Catherine Cortez Masto and Representative Dina Titus to repeal the new rule. The original bill, passed last week, included the gambling tax adjustment seemingly unnoticed by many legislators.
Senator Cortez Masto noted that many members of both parties were unaware of the provision before its passage. Representative Titus, in a July 7th statement, emphasized the unfairness of the new regulation, stating that her “My Fair Bet Act” aims to restore full deductibility of gambling losses, preventing taxation on unrealized winnings.
The adjustment specifically affects high-stakes gamblers, leaving winnings completely untaxed but limiting the deductibility of losses. While winnings remain fully exempt from taxation, the new law restricts the deduction of losses to 90% of the total amount. The bill’s passage, despite unanimous Democratic opposition, highlights a division within the Republican party, as three Republican senators voted against it.
The new law’s implementation in 2026 is unlikely to be without further challenges. Senator Ron Wyden highlighted the apparent lack of awareness among some Republican senators regarding the policy’s implications. While some Republicans express support for reversing the change, they reportedly seek concessions from Democrats in exchange for restoring the previous gambling tax standard. The future of this contentious legislation remains uncertain.
