Bill proposes restoration of full tax deduction for gambling losses
The Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act has been introduced in the U.S. Congress following the passage of the "One Big Beautiful Bill" (OBBB) on July 4, 2025. The FAIR BET Act, proposed by Rep. Dina Titus, aims to restore the 100% tax deduction for gambling losses, which was reduced to 90% in the OBBB.
The American Gaming Association (AGA) has expressed its support for the FAIR BET Act, stating that the gambling loss deduction is a tool for measuring income, not a subsidy for gaming customers. The AGA has also called for the repeal of the sports betting excise tax, a bonus depreciation extension, an increase in the slot tax-reporting threshold, and the rescindment of the tax on tips.
The AGA has also expressed a commitment to work with Rep. Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses. The AGA believes that non-itemizers should be allowed to net their gambling wins and losses for reporting adjusted gross income.
The U.S. gaming industry, which generates $329 billion in total economic output, $53 billion in federal, state, and local taxes, and 1.8 million jobs, stands to benefit significantly from the passage of the FAIR BET Act. Direct employment in the gaming industry includes nearly 600,000 jobs at casinos and corporate offices, more than 23,000 jobs at U.S.-based gaming-equipment manufacturers, and 89,000 jobs at businesses that serve patrons visiting casinos.
However, the bill's progress is not without opposition. Some Senate Republicans have expressed reservations, as seen in the blocking of a similar repeal attempt (Full House Act) in the Senate on July 10, 2025. Conservative groups, including efforts led by Mike Pence, advocate for maintaining the 90% deduction cap.
While the FAIR BET Act primarily addresses federal tax treatment of legal gambling losses, there is a potential indirect impact on illegal betting markets. By making taxation fairer and less punitive for legal gamblers and professionals, it could incentivize participation in legal betting channels over illegal markets. This is important given that prior to recent legalization trends, Americans spent an estimated $150 billion annually on illegal sports wagers. Improving tax fairness could indirectly reduce the appeal of illegal markets by making legal betting more financially equitable.
The future of the FAIR BET Act remains uncertain, with legislative action expected later in 2025. The AGA has stated that it will continue to work with Congress to advocate for the passage of the bill.
- The American Gaming Association (AGA) is advocating for the repeal of the sports betting excise tax as part of the FAIR BET Act, believing it to be an opportunity for fairer taxation on sports-betting activities in the business sector.
- The U.S. gaming industry, which encompasses employment in casino businesses, gaming-equipment manufacturing, and related service industries, is hopeful that the passage of the FAIR BET Act will positively impact its financial performance, generating more revenue and creating additional job opportunities.
- The FAIR BET Act, with its provisions focusing on the finance and taxation of legal betting earnings, could indirectly impact illegal betting markets by offering a more financially equitable environment for legal betting activities, including casino-games and sports-betting, potentially reducing the allure of illegal sports wagers.
