News Summary
House Ways and Means Committee Chairman Jason Smith is pushing to reverse a recent tax code change limiting gambling loss deductions. Following discussions with casino executives, he aims to restore the full 100% deduction before the change takes effect. The backlash from the gambling community highlights the controversy around the amendment, which critics argue could negatively impact the industry and individual gamblers alike. Lawmakers are exploring options to address these concerns as bipartisan support grows for the FAIR BET Act, a proposed legislation by Representative Dina Titus.
Las Vegas – House Ways and Means Committee Chairman Jason Smith (R-MO) has pledged to reverse a recently implemented change in the tax code concerning gambling losses. This commitment came following a meeting with three high-profile casino executives in Las Vegas on Thursday evening.
The controversial change limits gamblers’ deductions from their winnings from a full 100% to just 90% of their losses, putting many gamblers at a disadvantage. Smith announced his intention to restore the deduction to its original state before the change takes effect at the end of the year. This declaration was made less than 12 hours after discussions with gaming industry leaders regarding the implications of the tax alteration.
During a committee “field hearing” focused on the “One Big Beautiful Bill,” which was signed into law by President Donald Trump three weeks ago, Smith addressed the ramifications of the newly enacted tax provision. The hearing showcased testimonies from workers in various sectors who shared their experiences and the positive effects of the bill, including the cessation of taxes on tips.
Republicans are currently facing backlash surrounding the bill, which not only extends several expiring tax cuts but may also diminish Medicaid coverage for millions across the nation. Consequently, Smith attributed the inclusion of the gambling loss tax change to Senate Republicans, noting a swift reaction of outrage from gamblers and the broader gaming industry in response to the modification.
The tax alteration could mean that gamblers might be taxed on their winnings even if their gains and losses cancel each other out entirely. Following his initial remarks at the hearing, Smith showcased his willingness to work cooperatively with both Republicans and Democrats to address the tax change and restore former provisions for gamblers.
In reaction to these concerns, Representative Dina Titus (D-NV) introduced the FAIR BET Act shortly after the bill’s signing. This proposed legislation aims to restore the full 100% deduction for gambling losses and has gained bipartisan support. Titus has emphasized the Senate’s accountability for the amendment, indicating that the House had not approved any modifications to the gambling tax provisions.
Additionally, Representative Steven Horsford (D-NV), a fellow member of the Ways and Means Committee, criticized Senate Republicans for their involvement in the change, underlining the necessity for a commitment from Smith to proactively rectify the situation. Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) has highlighted potential adverse effects of the tax deduction change on Nevada’s tourism economy, which heavily relies on gambling revenue.
In an effort to address mounting concerns, some Senate Republicans, including Senators Ted Cruz and Bill Hagerty, are contemplating legislation to reverse the gambling tax change. Cruz has characterized the provision as both unfair and a mistake, suggesting that many Republicans were unaware of its implications during the voting process.
The nonpartisan Congressional Budget Office has estimated that the gambling tax change could generate an additional $1.1 billion in revenue over the next decade. Smith has reported receiving communication from various operators of the 13 casinos in Missouri, including two located in his district, who expressed unease regarding the tax alteration.
The gambling tax change is scheduled to be implemented in 2026, with many gamblers expected to only realize its impact when filing their taxes in 2027. Acknowledging the challenge of addressing the Senate’s last-minute adjustments, Smith has suggested that various options for rectifying the situation will be explored. Some Senate Republicans have signaled uncertainty about the backlash originating from the gambling tax change and acknowledged a lack of detailed understanding surrounding the issue.
As discussions continue, it remains to be seen how lawmakers will navigate the complexities of the tax code change and its implications for gamblers and the gaming industry alike.
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Additional Resources
- The Nevada Independent
- Wikipedia: Gambling
- NBC News
- Google Search: gambling tax deduction reversal
- USA Today
- Google Scholar: gaming tax policy
- Las Vegas Sun
- Encyclopedia Britannica: gambling tax
- Review Journal
- Google News: gambling tax reversal
