House Committee Advances Bill to Restore 100% Gambling Loss Deduction
House Ways and Means passed legislation restoring 100% gambling loss deductions by 38-5. IRS 2023 data shows 592,864 filers claimed $42.7B in losses against $50.1B winnings, affecting under 0.4% of taxpayers. The prior 90% cap was projected to yield $1.1B federal revenue over eight years.
SCCG Take — Restoration removes a tax distortion that risked pushing volume offshore. Operators in Nevada and other gaming states gain clearer net economics while maintaining strict IRS documentation standards.
The House Ways and Means Committee passed the Digital Asset Tax Certainty Act by a 38-5 vote. The 98-page bill centers on digital asset tax rules but includes a provision restoring the deduction for gambling losses to 100% of winnings.
This reverses a limit to 90% set by the One Big Beautiful Bill Act. Gaming industry leaders and delegations from Nevada, Pennsylvania and other states had warned that the cap would tax unrealized income, harm legal casinos and push activity offshore. The estimated federal gain from the cap was $1.1 billion over eight years.
Rep. Steven Horsford (D-NV) sponsored the incorporated language. Horsford stated: “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.”
IRS Data on the Deduction’s Reach
IRS statistics for the 2023 tax year show 15.1 million taxpayers filed itemized returns, down sharply after the 2017 Tax Cuts and Jobs Act. Of these, 592,864 claimed the gambling loss deduction. That figure equals less than 4% of itemized filings and under 0.4% of the 153 million total individual returns filed.
Gambling winnings reported exceeded $50.1 billion, with $42.7 billion in losses deducted. The 90% cap would have trimmed deductible losses to roughly $38.4 billion. The IRS requires gamblers to maintain verifiable records including receipts and tickets for any audit.
What Full Restoration Would Mean
As reported by Casino.org, the measure responds directly to industry lobbying that the prior limit threatened casino revenue, jobs and state tax collections. Full deductibility would eliminate the disincentive embedded in the 90% rule and align tax treatment with actual net results for players.
Operators in regulated markets should track the bill’s path through Congress. Enactment would remove a distortion that favored offshore channels and clarify record-keeping obligations under existing IRS rules.
Reporting: Casino.org News
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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