US industry fights back over betting deduction losses with launch of Fair Bet Act
With the detail in Donald Trump’s One Big Beautiful Bill (OBBA) Act, which passed the US House of Representatives last week, not proving so beautiful for betting professionals, US Rep. Dina Titus from Nevada’s first district has introduced the Fair Bet Act to try and restore some balance.
Hidden away in the Internal Revenue Code section, the bill states that bettors will only be allowed to deduct 90 per cent of their losses against 100 per cent of their winnings in any given year. Currently, bettors can deduct 100 per cent of losses against gains.
Professional poker player Phil Galfond said: “You can’t be a professional gambler in the US if this goes through and that will have a ripple effect on industries that depend on professionals. I know you think a lot of industries don’t depend on professionals but the poker industry does, the DFS industry does. This will impact all the players.”
The Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act, to give it its full name, would restore the ability for bettors to deduct 100 per cent of their annual losses against their gains.
Titus, a Democrat who said the betting provision was added to OBBA “by Senate Republicans without consent of the House,” brought on Rep. Ro Khanna from California to co-sponsor FAIR BET.
“My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won. This common-sense legislation will bring fairness back to gaming taxation, making sure that gamblers can fully deduct losses when they report their winnings. It gives everyone –from recreational gamblers to high-stakes gamblers — a fair shake. We should be encouraging players to properly report their winnings and wager using legal operators. The Senate change will only push people to not report their winnings and to use unregulated platforms.”
“It pushes people into the black market if they don’t do regulated gaming because they have a tax disadvantage. The black market doesn’t pay taxes, isn’t regulated, doesn’t help with problem gaming, so it’s bad for the industry, as well as for the player.”
CBRE Equity Research analyst John DeCree commented: “This could create phantom income for some high-volume gamblers that even breakeven or lose money in a given year, such as poker players and sports bettors. Although this customer cohort isn’t particularly profitable for the industry given the relatively low win margins, recreational players could also see higher tax liabilities and reduced betting volumes.”
The American Gaming Association applauded the launch of FAIR BET. “The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act,” the association said. “We are committed to working with Congresswoman Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses. Our industry’s ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of OBBBA that support consumers, encourage business innovation and investment, and strengthen U.S. competitiveness. We will work closely with Congress in the coming months to address the changes to wagering deduction losses and further modernize the tax code.”
The National Thoroughbred Racing Association (NTRA) also announced its support.
“The NTRA commends Congresswoman Titus for introducing the FAIR BET Act, which will restore the 100% tax deduction for gaming losses,” said .
NTRA President and CEO Tom Rooney“There is no Thoroughbred racing without horseplayers. The changes to the tax deduction are detrimental to them and must be fixed. We’re glad that swift bipartisan action is being taken. Along with Congresswoman Titus, the NTRA will continue to work alongside the Trump administration and leaders in the House and Senate to restore the tax deduction.”
Represntative Troy Nehls said: “While I proudly voted for the One Big Beautiful Bill Act, which prevents the largest tax hike in American history, the Senate’s version contained a provision that I strongly disagree with. Prior to the passage of the OBBBA, the tax code contained a 100 per cent deduction for gambling losses and expenses up to the amount of the individual’s winnings. This deduction was not changed in the House-passed version of the bill. The Senate, unfortunately, included a provision in their version of the legislation that reduced the allowable deduction to 90 per cent, creating an overly punitive tax on gambling. This provision is unfair, which is exactly why I am a cosponsor of Rep. Dina Titus’ FAIR BET Act.”
