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A federal tax change that could leave some gamblers owing tax even in a losing year is still awaiting action in Congress.
Nevada Rep. Steven Horsford is continuing to push lawmakers to restore the full gambling loss tax deduction after a provision signed into law in 2025 reduced the deduction from 100% to 90% of winnings starting in the 2026 tax year. For bettors who itemize, that means some could be taxed on part of their winnings even if their overall gambling activity produced a net loss.
Bill to reverse the 90% cap has cleared committee
Horsford and Rep. Max Miller introduced the bipartisan FULL HOUSE Act in January to reverse the deduction change. According to the bill’s backers, the measure would restore the previous 100% deduction for gambling losses.
The House Ways and Means Committee voted 38-5 on Sept. 16 to advance legislation carrying the FULL HOUSE Act’s text. That language moved forward as part of a broader markup tied to the Digital Asset Tax Certainty Act, and the underlying bill, H.R. 10357, passed committee on the same 38-5 roll call.
Even so, Congress has not set a timetable for a House floor vote, leaving the current 90% cap in place.
Horsford has argued that the change is unfair to taxpayers. When the bill was introduced, he said, “Taxing people on money they never actually earned is fundamentally unfair and harmful to Nevada’s economy.” He also warned the policy “would drive major tournaments abroad, push gaming underground, and hurt tourism across my state.”
What the tax rule means for bettors
The issue matters most to gamblers who itemize deductions on their tax returns. Under the current federal rule, regulated sportsbook customers and other bettors may still owe tax on a portion of winnings despite finishing the year with an overall gambling loss.
That makes the congressional timeline important. The reduced deduction is set to apply starting with the 2026 tax year, and there is still no public schedule for a floor vote in the House. It is also unclear whether the Senate will take up the FULL HOUSE Act or related legislation, and whether any eventual fix would be signed into law.
For now, the key point for players is simple: the 90% cap remains the law unless Congress passes a change.
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Source: As reported by Charlie Mullan.
