FAIR Bet Act to Restore Gambling Losses Deduction Shot Down in Military Bill
Posted on: September 9, 2025, 02:19h.
Last updated on: September 9, 2025, 02:29h.
- The FAIR Bet Act won’t be included in the National Defense Authorization Act
- Rep. Dina Titus says she will continue the fight in Congress
- FAIR Bet would restore the gambling losses tax deduction to 100%
House Republicans say Rep. Dina Titus’ (D-NV) attempt to add pork to the defense spending bill via a measure to restore the gambling losses tax deduction to 100% won’t be included in the final measure.
This week, the House Rules Committee rejected Titus’ proposed tack-on to the 2026 National Defense Authorization Act (NDAA). In August, Titus announced her plans to amend the military spending bill passed by the Senate to include the restoration of the gambling losses deduction to 100%.
Titus is behind the FAIR Bet Act (Fair Accounting for Income Realized from Betting Earnings Taxation Act). The federal statute — House Resolution 4304 — seeks to rescind a condition of the One Big Beautiful Bill (OBBA) passed by Republicans and signed into law by President Donald Trump in July.
The OBBB, beginning with the 2026 tax year, would limit the amount of gambling losses an individual filer could deduct from their gambling earnings from 100% to 90%. That means if a gambler wins $50K during a tax year, but also loses $50K, he would still need to pay tax on $5,000.
Titus Blames Republicans
Titus accused the GOP of preventing the gambling tax provision from being part of the defense spending package.
The GOP-controlled Rules Committee did not accept the FAIR Bet Act as an amendment to the NDAA. This was an easy fix that should have been adopted,” Titus said.
The 100% gambling loss deduction was in place for 70 years until the GOP-led OBBA passed Congress. Critics of the reduction say the outcome will push gamblers to offshore, unregulated gambling websites and unfairly punish both professional and casual gamblers alike.
“The result creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity,” said Bill Miller, president of the American Gaming Association (AGA).
The Joint Committee on Taxation estimates that the 90% gambling losses deduction would generate $1.1 billion in new federal tax revenue over 10 years.
The 2026 NDAA bill passed by the US Senate authorizes $924.7 billion in defense-related spending, with $878.7 billion going to the Department of Defense, which has been newly named the Department of War.
The NDAA is among Congress’ most critical legislative priorities each year. The bill provides Congress with the authority to allocate funding to defense programs through a subsequent bill, the Defense Appropriations Act.
Titus’ Fight Continues
Titus, who represents Las Vegas, says she will “continue to build support to restore the 100% gambling loss deduction.” The Democratic congresswoman already has bipartisan support, with the FAIR Bet Act listing four Republican cosponsors and eight Democratic signers.
FAIR Bet remains with the House Ways and Means Committee, the committee to which it was directed on July 7 following its filing by Titus.
Committee Chair Jason Smith (R-MO) has pledged to act on the measure. Smith said Senate Republicans were responsible for sliding in the gambling losses deduction, and he agrees that the deduction should be restored to 100%.
Last Comment ( 1 )
The reduction in the deductibility of gambling tax losses will mostly impact sharps, card counters, and professional sports bettors -- and these players are generally the least profitable customers for the gambling industry because they only bet when the odds are in their favor. Casinos and sports betting operators frequently restrict the size of these players' bets or even ban them outright because they do not want to lose money to them. One would think that legal gambling operators would want to leave this tax change in place so these money-losing customers will be driven out of their market completely!