The American Gaming Association (AGA) has officially expressed its support for newly proposed legislation that would reinstate the full 100% deduction for gambling losses on federal income taxes. The backing comes as part of the association’s ongoing effort to address recent changes in the U.S. tax code that have stirred concern among both the gaming industry and gambling participants.
On Monday, Congresswoman Dina Titus (D-Nev.), who co-chairs the Congressional Gaming Caucus, introduced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act. This legislative measure seeks to reverse a provision included in the recent tax reconciliation bill signed into law by President Donald Trump. That provision, set to take effect in 2026, limits the deduction of gambling losses to 90% instead of the longstanding 100%, with projections suggesting the change could generate approximately $1.1 billion in revenue.
Industry Leaders Push Back Against New Tax Provision
The reduction in deductible gambling losses has provoked criticism from lawmakers and gaming advocates who argue it unfairly penalizes players by taxing income they haven’t truly earned.
Speaking on the intent of her newly introduced legislation, Congresswoman Titus stated: “The recently passed budget bill included a provision inserted by Senate Republicans without consent of the House that imposed a tax increase on Americans who gamble by reducing from 100 percent to 90 percent the amount of losses they can deduct from gambling winnings for their income taxes.”
She further emphasized the need for fair treatment under the law: “My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won. This common-sense legislation will bring fairness back to gaming taxation, making sure that gamblers can fully deduct losses when they report their winnings. It gives everyone – from recreational gamblers to high-stakes gamblers – a fair shake.”
Titus also warned of the risks posed by the new deduction limits, noting that they could lead gamblers to avoid reporting winnings or to place bets with unlicensed platforms.
AGA Highlights Importance of Long-Standing Tax Treatment
The AGA has now stepped forward in support of the FAIR BET Act, praising Congresswoman Titus for championing this cause. “The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act. We are committed to working with Congresswoman Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses,” the association stated on Monday.
Although the AGA had previously refrained from commenting on the change, it had addressed the matter in a letter sent to the House Committee on Ways and Means in May. The letter referred to the gambling deduction framework as a key part of the tax code for more than 50 years, enabling itemizing taxpayers to offset their winnings with losses to accurately report net income from gambling.
The AGA reiterated that the 2017 Tax Cuts and Jobs Act (TCJA) did not treat gambling loss deductions as subsidies, but rather as necessary mechanisms for income accuracy. “It is a tool for properly measuring income. It is not only critical to maintain this deduction for taxpayers who itemize, but — as a matter of fairness — Congress should consider allowing for non-itemizers to net their gambling wins and losses for purposes of reporting adjusted gross income,” the letter read.
Wider Tax Reform Agenda for Gaming Industry
Alongside advocating for the FAIR BET Act, the AGA outlined a broader list of tax priorities in its communication with lawmakers. These include extending bonus depreciation, repealing the requirement to capitalize and amortize research and experimental expenditures, and maintaining the current corporate tax rate. Other priorities include the elimination of the federal excise tax on sports betting, an increase to the slot tax-reporting threshold, and maintaining deductions for business-related state and local taxes. The association also seeks the repeal of the tax on tipped income and the ability for Sovereign Tribal Nations to access Private Activity Bonds.
The AGA emphasized that these measures are necessary to support the regulated gaming industry, which contributes significantly to the U.S. economy. According to the association, the gaming sector generates $329 billion in total business output and delivers $53 billion in taxes to federal, state, and local governments—including $13.5 billion specifically from gaming-related taxes. The industry is also responsible for supporting 1.8 million jobs and providing $104 billion in labor income across wages, salaries, tips, benefits, and other forms of compensation.
Employment directly tied to the gaming industry includes nearly 600,000 roles at casinos and corporate offices, over 23,000 positions in gaming-equipment manufacturing, and another 89,000 jobs in ancillary businesses serving casino patrons.
By backing the FAIR BET Act and advocating for comprehensive tax reform, the AGA hopes to protect the integrity of legal gaming and ensure the industry continues to thrive under equitable federal tax policies.
Source:
‘’AGA backs bill to restore 100% deduction on gambling losses’’, cdcgaming.com, July 07, 2025.
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