House Panel to Consider Restoring Full Federal Deduction for Gambling Losses

The U.S. House Ways and Means Committee is set to consider legislation Wednesday that would restore the ability of taxpayers to deduct 100% of their gambling losses against gambling winnings for federal tax purposes.

The proposal would repeal the current 90% cap on deductions for wagering losses. It would apply to taxable years beginning after December 31, 2025, effectively providing retroactive relief for 2026.

The gambling-loss provision has been incorporated into House Resolution 10357, the Digital Asset Tax Certainty Act, as part of a broader 98-page legislative package. The Ways and Means Committee is also reviewing provisions involving digital assets, healthcare and other tax matters.

The measure is based on the bipartisan FULL HOUSE Act — the Facilitating Useful Loss Limitations to Help Our Unique Service Economy Act — introduced in January by Rep. Max Miller, R-Ohio. The legislation has four Democratic and two Republican cosponsors, including Nevada Democratic Reps. Steven Horsford and Susie Lee.

“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,” Horsford said.

“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,” he added.

Rep. Dina Titus, who has supported the similar FAIR BET Act, also expressed support for the inclusion of the provision in the tax package.

“Very pleased to see that my gambling loss tax deduction fix has finally been included in a tax package,” Titus said. “I encourage my Ways and Means colleagues to push it through this week as quickly as possible.”

The proposed change comes as prediction markets track the prospects of the legislation.

More than $3.1 million in trades have been recorded on contracts addressing whether the gambling-loss deduction will be restored. Traders are currently implying a 48% chance that the 90% limitation will be repealed by April 1, 2027.

The legislative language explicitly calls for the removal of the existing restriction.

“The proposal eliminates the 90% limitation on the deduction for losses from wagering transactions.”

The text further specifies that the change would apply to taxable years beginning after December 31, 2025.

“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.” 

By fLEXI tEAM