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Rules and licensingUs lawmakers move to restore full gambling loss tax deductions
The house committee voted to reverse a tax cap on gambling losses for itemizing filers.
Written by the BettingEdgeHub desk, 17 September 2026
Tax filers who itemize their federal returns could soon deduct one hundred percent of their gambling losses against winnings. The House Ways and Means Committee recently passed a bill that includes a provision to restore this full tax write off. Lawmakers and the gaming industry pushed hard for the change.
A costly tax cap
A previous law reduced the gambling loss deduction to ninety percent. Gaming industry leaders argued that this cap meant players who broke even could still face federal taxes on phantom earnings. Lawmakers from major gaming states warned that the cap would hurt local economies and push bettors toward offshore sites.
What the IRS data shows
Internal Revenue Service figures for a recent tax year show that a small fraction of overall taxpayers use the gambling deduction. Out of millions of individual returns, fewer than four percent of itemized filers claimed gambling losses. However, those who did use the deduction wrote off billions of dollars.
Record keeping rules
Tax rules still require gamblers who itemize to keep strict records of all winnings and losses. Bettors must prove these amounts with tickets, receipts, or statements if the agency audits their return. The restored deduction provides relief for serious players who track their action closely.
Full loss deductions protect serious bettors from paying taxes on money they did not actually profit.