Millions of Americans who bet on sports or hit casinos face a rude awakening in 2026. A new federal rule caps gambling loss deductions at 90 percent, forcing taxes on cash they never pocketed. The FAIR BET Act, a fix pushed by Nevada Rep. Dina Titus, stalled when the House Rules Committee rejected it as an add-on to the defense bill late last year.
The change stems from the One Big Beautiful Bill Act passed in July 2025. Lawmakers limited deductions for wagering losses to 90 percent of losses up to winnings.
This hits hard. Say you win $100,000 but lose the same amount. Under old rules, your net was zero, no tax owed. Now, you deduct only $90,000, so Uncle Sam taxes that extra $10,000 as income. The Joint Committee on Taxation says this tweak will pull in over $1.1 billion in new revenue.
Casual fans betting on the Super Bowl or weekend gamblers feel it most. Pros who track every wager also lose out. The rule starts with bets placed in 2026, filed on 2027 returns.
Titus Fights with FAIR BET Act
Rep. Dina Titus from Las Vegas launched the FAIR BET Act in July 2025. Her district pumps billions into gaming. The bill tweaks tax code Section 165(d) to restore full 100 percent deductions.
Titus calls it a simple fix. She wrote Ways and Means Chair Jason Smith in December urging a quick hearing. Now the bill boasts 23 cosponsors, split bipartisan with 13 Democrats and 10 Republicans.
Rep. Tom Cole, Oklahoma Republican and Appropriations chief, joined last week. His backing boosts hopes. Senate pal Catherine Cortez Masto filed a match-up bill too.
Supporters rally strong:
- American Gaming Association
- DraftKings and FanDuel
- MGM, Caesars, Wynn Resorts
- National Thoroughbred Racing Association
Rules Committee Halts NDAA Push
House leaders eyed the 2026 National Defense Authorization Act to slip in the FAIR BET fix. Titus pitched it as an easy win.
But the Rules Committee said no in September, then again late last year. They control what amendments reach the floor. Without their nod, the defense bill moved on clean.
Titus slammed the block on social media. She shifted to Ways and Means, the tax pros. No hearing date yet. Critics say revenue needs block quick changes.
| Scenario | Old Rule (100% Deduct) | New Rule (90% Deduct) | Tax Owed (22% Bracket) |
|---|---|---|---|
| Win/Lose $10K | $0 taxable | $1K taxable | $220 |
| Win/Lose $100K | $0 taxable | $10K taxable | $2,200 |
| Win $50K/Lose $40K | $10K taxable | $11K taxable | Extra $220 |
This table shows the bite for everyday players.
Gaming Hubs Feel the Heat
Nevada reels first. Las Vegas casinos draw 40 million visitors yearly. Tribal spots in Oklahoma and elsewhere worry too.
Offshore sites lure players dodging records. Regulated apps like FanDuel fear drop-offs. Poker pros like Erik Seidel warn it kills the game.
The 90 percent cap taxes losses, not wins, chasing folks from legal play. Economy takes a hit with fewer tourists spending.
Breakeven bettors skip trips. Sportsbooks see smaller bets. A Carry report notes early pullback in action.
Hope lingers. Cole’s support eyes budget bills. Tax talks loom later this year.
As 2026 unfolds, gamblers track every slip and win closer. This tax shift flips fun into math headaches, squeezing wallets nationwide. Lawmakers must weigh revenue against fair play.
