- A new bipartisan bill, the FAIR BET Act, aims to reverse a controversial tax rule buried in President Trump’s recently signed One Big Beautiful Bill.
- Introduced by Reps. Dina Titus and Ro Khanna, the legislation would restore gamblers’ ability to fully deduct losses against winnings.
- With the tax rule set to take effect in 2026, the FAIR BET Act is now headed to the House Ways and Means Committee for consideration.
WASHINGTON – Just days after President Donald Trump signed the One Big Beautiful Bill into law, bipartisan backlash took shape over a gambling provision that forces bettors to pay taxes on phantom winnings. On Monday, Nevada Congresswoman Dina Titus introduced H.R. 4304, a bill aimed at reversing the change and restoring full loss deductions for gamblers.
As the law stands, it limits the amount gamblers can deduct in losses, up to 90% of their winnings. That means even gamblers who break even, or lose money overall, could still owe taxes starting in 2026. Titus called the change “an attack on legal gambling”.
“This common-sense legislation will bring fairness back to gaming taxation,” Titus said in a statement. “We should be encouraging players to report their winnings honestly…”
Titus, whose district includes part of Las Vegas, has partnered with California Rep. Ro Khanna to sponsor the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act. The bill would fully restore the long-standing ability for gamblers to deduct 100% of their losses against reported winnings.
Responses From The Industry
While the American Gaming Association had previously applauded the passage of OBBA, it is now also throwing its support behind FAIR BET. The AGA said it is working with Titus and other lawmakers to reinstate the prior standard for gambling taxation.
Further Reading: Offshore Sportsbooks Win in Trump’s One Big Beautiful Bill
Industry stakeholders warn that the consequences of the new tax rule could ripple through the entire gaming ecosystem. Professional poker player Phil Galfond warned on social media that the change could end the careers of many professional gamblers and hurt casual bettors as well.
“You could pay more in taxes than you actually won,” Galfond said, before later clarifying that while some pros may adapt, others won’t survive.
Victor Rocha, chair of the Indian Gaming Association conference, put it more bluntly: “The entire industry is freaking out.”
Behind the scenes, critics allege the legal sports betting provision was inserted by Senate Republicans without adequate debate or analysis. Titus noted that the House never approved the change, and tax experts say the revenue projections at $1.1 billion are misleading and short-sighted.
“Did anyone think this through?” asked gambling-focused CPA Russell Fox. “This is bad for the casino industry, bad for gamblers, and bad for the IRS. We need less complexity, not more.”
With sports betting taxes now a major contributor to federal and state coffers, the FAIR BET Act has already ignited interest from lawmakers in states with legal sports betting and casino gambling. Whether Congress can move quickly enough to reverse the rule before it takes effect remains to be seen, as the measure heads to the House Committee on Ways and Means.
