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Bill to Restore Gambling Loss Deduction Levels is Introduced in U.S. House

Sports Writer

Publish Date: Jul 28, 2025

Fact checked by: Sara Jane Gamelli

In the latest news, a U.S. congressman is trying a 'do-over' for tax policy regarding gambling losses. Kentucky representative Andy Barr has introduced a piece of legislation that attempts to claw back the upper limits for deductions from gambling losses.

When Donald Trump's so-called “One Big Beautiful Bill Act” was signed into law in early July, it included a provision to reduce the amount of claimable gambling losses from 100% to 90%.

That law has been criticized by many in the gaming industry as an undue burden on gamblers who have a bad year of wagering.

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The Barr bill reads in part:

"For purposes of losses from wagering transactions, the amount allowed as a deduction for any taxable year ... shall be equal to 90 percent of the amount of such losses during such taxable year, and ... shall be allowed only to the extent of the gains from such transactions during such taxable year."

Under the new Trump-backed law, any gambler who reported a loss above 90% would be forced to pay taxes on money they lost. Many in the industry, including sweepstakes casinos, traditional casinos, online casino operators, game companies, and many regulators, have aligned in opposition to the 90% threshold.

Bills in House and Senate Aim to Rectify Gambling Deduction Snafu

U.S. House Rep. Dina Titus, a Democrat from Nevada, has introduced House Resolution 4304, which also brings the gambling loss deduction ceiling back to 100%.

She recently spoke up at a hearing on gaming in Las Vegas to say that under the current law, some bettors may be promoted to not report their losses in excess of 90%, to avoid the tax.

In the U.S. Senate, yet another bill is being bandied about that would also raise the deduction limit.

Earlier this month. Nevada Senator Catherine Cortez Masto unveiled Senate Bill 2230. But even thought S2230 received unanimous support, it has failed to emerge from a committee designed to mark up the language and come to agreement on its details.

Sen. Cortez Masto was nonplussed over the change that came out of Trump's law.

“[Gamblers with excessive losses would] literally be paying taxes on money they don’t have,” Sen. Cortez Masto said. “This makes no sense, and it will do irreparable harm to our country’s gaming industry if it takes effect, especially in Nevada.”

Most states allow gamblers to deduct losses from gambling, while they also require reporting of any winnings above a certain amount. Recently, the growth of legal online gaming has spurred lawmakers to consider new ways to grab tax revenue from the activity.

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