Senate Republicans Block Cortez Masto’s Bid to Restore Full Gambling Loss Deduction
Senate Republicans blocked a bipartisan effort led by Nevada Senator Catherine Cortez Masto to restore the 100% tax deduction for gambling losses, reduced to 90% under President Trump’s “One Big Beautiful Bill” (OBBB).
The OBBB’s Tax Hike on Gamblers
The OBBB’s reduction of gambling loss deductions from 100% to 90% means bettors face taxes even when breaking even. For example, a gambler winning and losing $100,000 would owe taxes on $10,000, despite no net gain.
“This makes no sense and will do irreparable harm to our gaming industry, especially in Nevada,” Cortez Masto said, warning of impacts on Las Vegas, the “gambling capital of the world.”
The provision, expected to raise $1.1 billion over eight years, was added to comply with Senate budget rules, yet many lawmakers were unaware of it until after passage.
Cortez Masto’s Push for a Fix
Cortez Masto sought unanimous consent to pass the FULL HOUSE Act (S.2230), a one-page bill to restore full deductions, supported by Senators Ted Cruz (R-TX) and Jacky Rosen (D-NV).
She argued it would prevent players from turning to unregulated offshore markets, which don’t contribute to state taxes or responsible gaming programs. “It could push events like the World Series of Poker offshore and punish tourists,” she stated on the Senate floor.
However, Senator Todd Young (R-IN) objected, demanding an unrelated amendment to restore tax exemptions for religious institutions, which was rejected by Senator Ron Wyden (D-OR), stalling the bill.
The tax change threatens Nevada’s economy, which relies on gaming for nearly one-third of its jobs. Representative Dina Titus (D-NV), who introduced the similar FAIR BET Act in the House, called it a “direct hit on Las Vegas,” risking billions in federal revenue as players shift to black markets.
Professional poker players like Phil Galfond warned it could “end professional gambling,” impacting high-stakes and recreational bettors who itemize deductions.
Despite claims from analysts like Jordan Bender that 99% of casual gamblers won’t be affected, Titus emphasized the broader economic fallout.
Cortez Masto’s bill now faces the Senate Finance Committee, with a House “blue slip” issue looming due to revenue bill origination rules. Titus urged both chambers to back her FAIR BET Act to ensure “gamblers don’t pay taxes on money they never won.” “I’m disappointed, but I am not done,” Cortez Masto said, vowing to continue pushing for the fix before the 2025 tax year.
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