Gambling Tax Alert: New Law Cuts Loss Deductions, Bettors Face Big Hit
A new law limits gambling loss deductions to 90%, increasing tax liabilities for bettors, prompting legislative efforts to restore the full deduction.Summary
The One Big Beautiful Bill Act of 2025 includes a provision limiting the deduction of gambling losses to 90% of the taxpayer’s losses, expected to generate $1.1 billion in tax revenue. Previously, gamblers could deduct losses up to the amount of their winnings. This change impacts taxpayers who itemize deductions, potentially increasing their tax liability, especially high-stakes gamblers. Legislators like Representative Dina Titus and Senator Catherine Cortez Masto have introduced bills – the FAIR BET Act and similar legislation – to repeal the limitation, citing concerns it could drive gambling activity underground or offshore. While initial efforts faced roadblocks, a new bipartisan bill, the FULL HOUSE Act, offers renewed hope for restoring the full deduction. If the law remains unchanged, gamblers may face higher taxes and could be incentivized to reduce gambling activity or engage in unreported earnings.
(Source：Forbes)