Legislator Dina Titus presents the FAIR BET Act, an initiative aimed at reinstating tax breaks for gambling losses
The FAIR BET Act: A Push to Level the Gambling Tax Playing Field
The gambling industry in the United States is facing a significant change with the introduction of the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act. This legislation aims to reverse a recent tax change that has impacted commercial casinos, iGaming, sports betting, and tribal gaming.
Impact on Commercial Casinos, iGaming, and Sports Betting
The change, introduced by the "One Big Beautiful Bill" (OBBB), reduced the deductible portion of gambling losses from 100% to 90%. This shift has benefited major casino operators like MGM Resorts and Caesars Entertainment, potentially boosting their annual tax savings by $80-$100 million or more through lower tax payments. However, the same change has increased the effective tax burden on professional and high-volume gamblers, who now have to pay taxes on 10% of their theoretical "phantom" winnings, even if they break even overall.
The gambling industry, including operators like DraftKings and trade associations such as the American Gaming Association, strongly support the FAIR BET Act. They argue that it is necessary to restore the full 100% deduction for gambling losses to maintain equitable tax treatment for customers and professional gamblers.
Impact on Tribal Gaming
While specific tribal gaming effects are less directly detailed, discussions within the industry suggest that the same tax deduction changes and their reversal would influence tribal casinos as well. Lower tax burdens and restored loss deductions would similarly affect operations and customers within tribal gaming.
Legislative Status and Outlook
The FAIR BET Act, introduced by Rep. Dina Titus (D-Nev.), seeks to reinstate the full 100% deduction starting January 1, 2026. As of mid-2025, efforts to overturn the deduction cap have failed but continue with advocacy from industry groups, professional gamblers, and lawmakers. Congress faces a legislative deadline before the 2026 tax year implementation; without action, the 90% deduction cap becomes permanent.
Bipartisan support exists for the FAIR BET Act, with Rep. Titus leading and others like Reps. Ro Khanna and Troy Nehls backing the bill. This reflects broad industry and public pushback against the OBBB gambling tax provision.
If passed, the FAIR BET Act would mitigate the tax increase imposed by the 2025 federal budget bill, leveling the tax treatment and potentially stabilizing player profitability and industry growth across all sectors of U.S. gambling. However, concerns remain about the potential for bettors to shift towards offshore outlets and predictions markets, which do not invest in bricks and mortar, pay state taxes, hire union labor, or contribute to problem gaming efforts.
In conclusion, the FAIR BET Act is a significant piece of legislation that could reshape the U.S. gambling landscape. Its passage would restore prior gambling loss deduction levels, impacting all sectors of U.S. gambling and potentially benefiting both the industry and its customers.
Casinos and gambling establishments, including commercial casinos, iGaming platforms, and sports betting operators, have voiced their support for the FAIR BET Act, asserting that the restoration of the full 100% deduction for gambling losses is essential for maintaining fair tax treatment for customers and professional gamblers.
The passage of the FAIR BET Act could have far-reaching implications for tribal gaming as well, as discussions within the industry suggest that the same tax deduction changes and their reversal would similarly impact tribal casinos and their customers.
