House Committee Advances Repeal Of 90% Loss Deduction Rule

Gamblers who were angered and felt their livelihoods were threatened by the new tax deduction rules included in the Trump Administration’s One Big Beautiful Bill Act (OBBBA) have taken a significant step toward a return to the status quo. On Wednesday, the House Ways and Means Committee advanced H.R. 10357, the Digital Asset Tax Certainty Act, which includes language repealing the 90% loss deduction stipulation in the OBBBA.

The legislation, which contains H.R. 6985, the FULL HOUSE (Facilitating Useful Loss Limitations to Help Our Unique Service Economy) Act, among other tax rules that are unrelated to gambling, passed the committee by a vote of 38-5.

The next step is a hearing in the House Rules Committee, typically just a formality before legislation advances to a full vote on the House floor.

When contacted by Casino Reports Wednesday afternoon, neither representatives of the Ways and Means Committee nor in FULL HOUSE Act co-sponsor Rep. Steven Horsford’s Washington, D.C. office had any information as to the potential timeline for the bill to be heard on the House floor.

All signs, however, point toward a lengthy wait. House Speaker Mike Johnson announced Wednesday that the House would be adjourning early, postponing any votes until after the Nov. 3 midterm elections.

‘A basic principle of fairness’

Horsford, a Nevada Democrat, said in an opening statement before the committee Wednesday, “This provision corrects the wagering loss deduction that can create a phantom tax liability for people who have no net wagering winnings.”

He went on to explain how the OBBBA’s rule limiting deductions on gambling losses to 90% while taxing 100% of winnings could leave a break-even player owing the government money.

“The FULL HOUSE Act,” Horsford continued, “restores the longstanding rule allowing taxpayers to deduct 100% of their wagering losses, up to the amount of their winnings, subject to the applicable deduction requirements. … It restores the rule that existed before last year’s change. For Nevada, and other states, this issue has significance beyond an individual tax return. Gaming is central to our economy, and for workers and families throughout my district, they depend on it, including union workers.

“We should have a tax code that does not tax people on money they did not actually earn. That is a basic principle of fairness.”

If H.R. 10357 passes the House and then the Senate and is not vetoed by the president, the cap on gambling losses will be repealed retroactive to Jan. 1, 2026.

Rep. Dina Titus, also a Nevada Democrat, was the first to introduce legislation to repeal the OBBBA’s gambling tax provision — H.R. 4304, the FAIR BET (Fair Accounting for Income Realized from Betting Earnings Taxation) Act — and though it wasn’t her bill that got attached to H.R. 10357, Titus supports passage of Horsford’s and Ohio Rep. Max Miller’s similar legislation.

“After 14 months of fighting to get this commonsense, bipartisan fix through committee, we must now encourage the House to approve this measure before Jan. 1, 2027,” Titus said in a statement Wednesday. “This would stop the reduction to 90% from taking effect and ensure gamblers across the nation do not pay this tax on phantom money they never won. Altering the tax code was a ruse in the One Big Beautiful Bill at the expense of recreational and professional gamblers. As I have said many times, it must be fixed.”

Titus continued: “I am disappointed it took the House committee so long to take action. I spoke at a Ways and Means Committee field hearing in Las Vegas in July 2025 to bring the consequences of reducing the deduction to their attention. Over the next several months, I wrote letters to the committee urging it to include the fix in an upcoming package. Nothing happened until now, when the House will be out of session until after the election. The Republican House leadership must bring this provision to the floor, and the Senate must also expeditiously pass it if we are to prevent the tax from taking effect and harming gamblers nationwide.”