The Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act aims to restore the 100% deduction for gambling losses. Introduced by U.S. Rep Dina Titus of Nevada, co-chair of the Congressional Gaming Caucus, the act seeks to amend provisions of a recent reconciliation bill signed into law that limits gamblers to deducting only 90% of their losses.
Fair BET Act and Gambling Losses
This provision, slated for effect in 2026, could generate $1.1 billion in revenue but faces heavy criticism from lawmakers in pro-gambling states. Currently, gamblers can deduct 100% of their losses up to the amount of their winnings on their taxes.
“The recent budget bill’s tax provision, added by Senate Republicans without House consent, creates undue burden,” Titus explained. “The FAIR BET Act will ensure gamblers aren’t taxed on money they haven’t earned.”
This measure aims to restore fairness in gaming taxation, benefiting both recreational and high-stakes gamblers by encouraging proper tax reporting. Titus argues that failure to restore the deduction may push gamblers to report less or turn to unregulated sites.
Long-term Implications for Gamblers and the Industry
According to Titus, this measure affects the gaming industry and tourism, particularly those attempting to comply with tax laws, thereby sending players to offshore outlets that don’t contribute to local economies.
At a panel discussion hosted by the Indian Gaming Association, Victor Rocha highlighted industry-wide concern, stating it could impact tribes severely and push gamblers to avoid reporting winnings by utilizing offshore sites. A Las Vegas accountant fears this provision will harm industry revenue and insists that a simpler tax system is necessary.
Professional poker player Gil Galfond expressed worries on social media, stating that the change might end professional gambling in the U.S. and negatively impact casual players. Though later clarifying his stance, Galfond maintained that many professional players might not survive under the new tax rules.
The American Gaming Association has not explicitly commented on this provision, but support exists for the overall tax bill. As debates continue, potential impacts on gamblers and the industry remain a significant concern.
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