The House Ways and Means Committee has advanced a measure that would restore the full federal deduction for gambling losses, giving supporters a narrower but more concrete path to reverse a 2025 tax change before it takes effect on Jan. 1, 2027. The committee attached the fix to H.R. 10357, the Digital Asset Tax Certainty Act, according to Yogonet.
The issue matters because the 2025 law reduced the allowable deduction for wagering losses from 100% to 90%. Backers of the repeal say that can create taxable income even for people who broke even for the year, a result critics have described as tax on “phantom” winnings.
What Changed
The committee approved the gambling-loss fix on Sept. 17 after folding it into H.R. 10357. Yogonet reported that Rep. Dina Titus, D-Nev., had pushed for the change since introducing the bipartisan FAIR BET Act on July 7, 2025.
The Nevada Globe reported the committee vote was 38-5. That outlet also said the measure would restore the 100% federal income tax deduction for gambling losses and repeal the 90% cap enacted in July 2025.
The underlying change traces to the One Big Beautiful Bill, which President Donald Trump signed on July 4, 2025, according to Yogonet. That law cut the deduction from 100% to 90%, but the lower cap is scheduled to take effect on Jan. 1, 2027 unless Congress changes the law first.
Supporters are now racing the calendar. Passage by the committee is only one step: the House still needs to pass the bill, the Senate must approve its own version, and the president must sign final legislation before the 2027 effective date.
Who Is Affected
The immediate impact would fall on taxpayers who report gambling winnings and losses on their federal returns. Based on the figures described in the source reports, the concern is greatest for people with substantial gross winnings and substantial gross losses during the year, even if their net economic result is flat or modest.
The political coalition behind the measure extends beyond individual gamblers. Yogonet said supporters include the American Gaming Association, MGM Resorts International, Caesars Entertainment, Wynn Resorts Ltd., DraftKings, FanDuel, the Nevada Resort Association and the National Thoroughbred Racing Association. SCCG Management separately reported that Nevada representatives Dina Titus and Steven Horsford have led the effort in the House.
The Senate also has a bipartisan companion effort. Yogonet reported that Nevada Democrats Catherine Cortez Masto and Jackie Rosen have co-sponsored the FULL HOUSE Act with Sen. Ted Cruz, R-Texas.
For households with large and frequent gambling activity, the tax treatment can matter more than the headline implies. A rule that limits loss deductions to less than full winnings can increase adjusted taxable income even when there is little or no net gain from wagering overall.
The After-Tax Math
The core issue is straightforward: under a 90% cap, losses would no longer fully offset winnings for tax purposes.
Example: a taxpayer has $100,000 of gambling winnings and $100,000 of gambling losses for the year.
| Scenario | Winnings | Allowed loss deduction | Taxable gambling income |
|---|---|---|---|
| 100% deduction restored | $100,000 | $100,000 | $0 |
| 90% cap remains | $100,000 | $90,000 | $10,000 |
That break-even example appeared in reporting by The Nevada Globe and SCCG Management. SCCG also gave a smaller illustration: a taxpayer with $10,000 of winnings and $10,000 of losses could still have $1,000 of taxable gambling income if the 90% cap remains in place.
For high earners, the practical after-tax effect is that the rule may push more income onto the federal return without a matching increase in actual cash retained. The exact federal tax cost would depend on the rest of the taxpayer’s return, so the size of the bill would vary. But the policy debate is not about a marginal-rate change; it is about whether fully offsetting losses remain deductible against winnings.
What Households May Want to Discuss
Nothing has changed for current law yet. The committee vote does not itself restore the deduction. Households with meaningful wagering activity may want to track whether Congress completes the legislative process before Jan. 1, 2027.
For taxpayers who expect large gambling winnings and losses, recordkeeping may remain especially important. The examples in the reporting assume taxpayers can substantiate both sides of the equation. Households in this situation often discuss timing, documentation and estimated-tax implications with a CPA before year-end, particularly if the law remains unsettled late in 2026.
This is also a reminder that gross-income items can matter even when net economics look flat. For affluent families managing stock compensation, business income, investment gains and itemized deductions, an extra $10,000 or more of federally taxable income from gambling could affect the broader return.
What to Watch Next
The next question is whether House leadership schedules a floor vote in time. Titus said, according to Yogonet, that action is needed before Jan. 1, 2027 so the 90% reduction does not take effect.
After that, the Senate would still need to act on its companion bill, and any final measure would require the president’s signature. Until then, the restoration remains a proposal, not enacted law.
The committee vote is still notable because it moves the issue from complaint to live legislation. For taxpayers affected by gambling reporting, that means the window for a federal fix is open, but still narrow.
Sources
- First reported House committee advances measure to restore full gambling loss tax deduction — Yogonet
- House Ways and Means Advances Nevada-Backed Bill to Kill Phantom Income Tax and Restore 100% Gambling-Loss Deductions — The Nevada Globe
- House Ways and Means Committee Approves Measure to Restore Full Deduction for Gambling Losses — SCCG Management
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