U.S. House Ways and Means Committee Considers Full Gambling Loss Tax Deduction Restoration

The U.S. House Ways and Means Committee will consider legislation Wednesday that would restore a 100% federal tax deduction for gambling losses against winnings.

The proposal eliminates the current 90% limitation on deductions for wagering losses. It applies to taxable years beginning after Dec. 31, 2025, providing retroactive relief for 2026.

Bipartisan Legislation Details

The gambling provision has been added to House Resolution 10357, the Digital Asset Tax Certainty Act, as part of a 98-page legislative package also covering digital assets, healthcare, and tax policy. It is based on the FULL HOUSE Act, introduced in January by Rep. Max Miller (R-Ohio). The bill is cosponsored by four Democrats and two Republicans, including Nevada Democrats Reps. Steven Horsford and Susie Lee.

Horsford said: “People should not pay taxes on money they never earned. That’s why I introduced the bipartisan FULL HOUSE Act and have worked for months to secure a full repeal of the unfair gambling tax that Senate Republicans enacted last year.”

He added: “For Nevada, this is about protecting our economy and the workers and small businesses who depend on tourism and gaming. Their livelihoods are at stake.”

Rep. Dina Titus, who has backed the similar FAIR BET Act, said: “Very pleased to see that my gambling loss tax deduction fix has finally been included in a tax package. I encourage my Ways and Means colleagues to push it through this week as quickly as possible.”

Market Readings and Statutory Text

Prediction markets have recorded more than $3.1 million in trades on contracts concerning whether the deduction will be restored. Traders imply a 48% chance that the 90% limitation will be repealed by April 1, 2027.

The legislative text states: “The proposal eliminates the 90% limitation on the deduction for losses from wagering transactions.” It adds: “Accordingly, for taxable years beginning after December 31, 2025, losses sustained during the taxable year on wagering transactions are allowed as a deduction to the full extent of the gains during the taxable year from such transactions.” As reported by Yogonet International, the committee review puts the issue before lawmakers this week.

What This Means for Tax Treatment

The measure, if advanced, would directly address the deduction limit enacted by Senate Republicans last year. Operators and gaming-dependent jurisdictions like Nevada will track whether the committee moves the package forward, given the explicit retroactive start date and the current market pricing of passage odds.

Reporting: Yogonet International

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