How the Rejection of the FAIR Bet Act Impacts Gambling Taxation and Loss Deductions

• The FAIR Bet Act won’t be included in the National Defense Authorization Act
• Rep. Dina Titus says she will continue the fight in Congress
• FAIR Bet would restore the gambling losses tax deduction to 100%

House Republicans have declined Rep. Dina Titus’ proposal to incorporate a measure to restore the gambling losses tax deduction to 100% in the National Defense Authorization Act (NDAA).

This week, the House Rules Committee expressed their discontent with Titus’ amendment to the 2026 NDAA, which aimed to fully restore the gambling losses deduction—giving the legislation the name FAIR Bet Act (Fair Accounting for Income Realized from Betting Earnings Taxation Act).

The OBBA limits the amount of gambling losses an individual can deduct from their gambling earnings, leaving it at 90%. Thus, if a gambler wins $50,000 but also loses $50,000, they would still be liable for tax on a minimum of $5,000, significantly harming many bettors.

Titus Blames Republicans

Titus argues that the GOP is preventing the gambling tax provision from being included in the necessary defense spending package.

“The GOP-controlled Rules Committee did not accept the FAIR Bet Act as an amendment to the NDAA. This was an easy fix that should have been adopted,” Titus stated.

The 100% gambling loss deduction was a provision for 70 years until the GOP-led OBBA was passed. Critics claim that such reductions will drive gamblers to unregulated offshore websites, disproportionately hurting both casual and professional gamblers.

According to Bill Miller, the president of the American Gaming Association (AGA), “The result creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity.” Additionally, the Joint Committee on Taxation estimates that the proposed 90% deduction choice could yield $1.1 billion in federal tax revenue over a decade.

The Senate has passed the 2026 NDAA bill, which authorizes $924.7 billion for defense spending, with $878.7 billion allocated specifically for the Department of Defense (now called the Department of War).

Titus’ Fight Continues

Representing Las Vegas, Titus expresses determination to rally support to restore the 100% gambling loss deduction. Her efforts have gained bipartisan support with the FAIR Bet Act displaying four Republican co-sponsors and eight Democratic signers.

The FAIR Bet remains in the House Ways and Means Committee, where it was directed on July 7 after its filing by Titus. Committee Chair Jason Smith (R-MO) has committed to addressing the measure, confirming his view that the deduction should indeed revert to 100%.