Under the One Big Beautiful Bill Act (OBBBA), Congress cut the long-standing 100 % deduction for gambling losses down to 90%. Previously, gamblers who itemized deductions could offset online casino games, online slot games, and other wins with full losses, paying taxes only on net gains.
If the 90% cap becomes law beginning in tax year 2026, players would face “phantom income” taxes. For example, a gambler who wins $100,000 and loses $100,000 could deduct only $90,000 in losses, thus owing tax on $10,000 of no real profit.
The change hits both professional gamblers and casual bettors. High-volume players who depend on tight margins could be pushed out of legal markets entirely. Meanwhile, casual players might reduce wagering on online slot games or limit use of online casino games to avoid larger tax burdens.
Casinos and regulated gaming platforms fear revenue erosion if top bettors leave. Industry groups warn the tax change could prompt a shift toward offshore, untaxed platforms.
Legislators and Industry Push Back Against the 90% Cap
Lawmakers and industry stakeholders are mounting pressure on Congress to reject the 90 % cap and restore full deduction. They argue the cap is unfair and detrimental to regulated gaming.
Representative Dina Titus (D-NV) introduced the FAIR BET Act, seeking to reinstate the 100 % deduction. She aimed to attach it as an amendment to the 2026 defense budget to force its consideration. Co-sponsors from both parties have joined her effort.
However, the FAIR BET Act has not received a vote in the House Ways and Means Committee, the first and crucial step to start its legislation process.
At industry conferences, casino executives and trade groups publicly decry the cap. They lobby congressional committees and urge members to support the restoration before the change kicks in.
Some propose bundling the deduction fix into must-pass tax or appropriations bills to force legislative attention.
That said, the clock is ticking. With the cap scheduled to take effect on January 1, 2026, opponents of the reduction warn that failure to act could undercut the long-term stability of the U.S. regulated gambling sector.
