A Senate proposal looks to repeal the gambling tax penalty Congress recently passed as part of the “One Big Beautiful Bill Act.”
Key takeaways
- The One Big Beautiful Bill Act (BBB) reduces the losses gamblers can deduct from their winnings.
- Senate Bill 2330, like the House version, aims to strike the newly added limit on gambling deductions.
- The House version, H.R. 4304, was introduced Monday and is currently in the House Ways and Means Committee.
Sen. Catherine Cortez Masto (D-NV) introduced Senate Bill 2330 (S.2230) Wednesday. The proposal, the Facilitating Useful Loss Limitations to Help our Unique Service Economy -- or FULL HOUSE Act – looks to reinstate the loss deduction allowance in place before BBB’s passage.
The bill has bipartisan support from its two sponsors, Sen. Ted Cruz (R-TX) and Sen. Jacky Rosen (D-NV). Cruz is an unlikely sponsor, given Texas hasn't legalized sports betting nor allowed the influx of resort casinos – much to the Las Vegas Sands' chagrin.
Sen. Cortez Masto tried to push the bill directly to a Senate vote by requesting unanimous consent, but Sen. Todd Young (R-I) voted that initiative down. The bill now heads to the Senate Finance Committee.
Background
The One Big Beautiful Bill's goal was to cut healthcare and food assistance programs, phase out renewable energy credits, and increase the budget for immigration control – while extending tax breaks for individuals and businesses. All those were codified into law when President Trump signed the bill into law on July 4.
One sentence out of the 887-page bill, however, created a huge tax headache for gamblers and legalized sportsbooks. The sentence that reduced the amount of losses a bettor could deduct from 100% to 90% escaped notice by most until after the measure became law. The law, as it stands today, could easily result in a gambler paying taxes on more money he or she won.
Dueling congressional bills
Rep. Dina Titus (D-NV) introduced H.R. 4304 Monday. Titus’ proposal is dubbed the Fair Accounting for Income Realized from Betting Earnings Taxation – or the FAIR BET Act. Rep. Ro Khanna (D-CA) co-sponsored it, but also has the support of Reps. Steven Horsford (D-NV), Jeff Van Drew (R-NJ), Mark Amodei (R-NV), and Troy E. Nehls (R-TX).
In her initial press release, Titus called out the Senate for inserting the provision. And she doesn’t seem pleased the Senate is now trying to take credit for attempting to undo the problem it created.
Titus posted on social media, “A reminder for my friends in the Senate: Revenue bills must originate in the House, per the Constitution. Any bill or unanimous consent action in the Senate would be just for show. My FAIR BET Act is the real fix to the Senate’s error in lowering the gambling loss deduction to 90%.”
Regardless of political grandstanding, the fact that both congressional bodies are working hard to overturn a provision few Senators knew they were approving is a good thing for gamblers and licensed gambling providers.
