Odds Improve That Federal Tax Deduction for Gambling Losses Will Be Restored to 100%

The odds of gamblers being allowed to write off 100% of their gambling losses against their winnings shortened this week when a proposal to eliminate the One Big Beautiful Bill tax provision was included in a legislative package being considered by the House Ways and Means Committee.

The oldest committee of the United States Congress, the Ways and Means Committee is meeting this week on Capitol Hill, where the chief tax-writing body is considering legislation related to digital assets, health care, and tax policy. The gambling deduction reinstatement has been tacked on to House Resolution 10357, the Digital Asset Tax Certainty Act.

On page 95 of the 98-page legislative package, the bill proposes the reinstatement of rules for wagering losses.

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

The proposal suggests restoring the deduction for gambling losses to 100% against winnings, and making the tax rule retroactive for 2026.  The Ways and Means Committee will consider the bills this Wednesday (Sept. 16).  

Nevada Lawmakers Take Credit

The Ways and Means Committee proposal to restore the gambling losses deduction is based on the FULL HOUSE Act (Facilitating Useful Loss Limitations to Help Our Unique Service Economy). Introduced in January by Rep. Max Miller (R-OH), the bill is cosponsored by four Democrats and two Republicans, including Nevada Democrats Reps. Steven Horsford and Susie Lee.

Horsford celebrated the bill being slid into the Digital Asset Tax Certainty Act.

“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,” the congressman continued.

Rep. Dina Titus, who authored a similar bill called the FAIR BET Act (Fair Accounting for Income Realized from Betting Earnings Taxation), also welcomed the Ways and Means Committee’s inclusion of the gambling deduction revision.

Odds of Deduction Restored

Prediction markets are running contracts allowing traders to predict whether the deduction for gambling losses will be restored to 100%. More than $3.1 million has been traded, with traders implying there’s a 48% chance of the reduction being repealed by April 1, 2027.