Gambling Loss Deduction Rollback Blocked as House Advances Funding Bill

Efforts to reverse a controversial change to federal gambling tax policy stalled again this week, highlighting how massive spending bills can quietly rewrite tax rules with real consequences for taxpayers.

The U.S. House approved H.R. 7148, the Consolidated Appropriations Act, without including a proposed amendment that would have restored the full deductibility of gambling losses. The amendment sought to undo a provision inserted into last year’s reconciliation package, often referred to as the One Big Beautiful Bill, which reduced allowable gambling loss deductions from 100 percent to 90 percent beginning this year.

Under the revised tax rule, gamblers who report equal amounts of winnings and losses would still owe taxes on 10 percent of their reported winnings, even though they did not realize an actual profit. Supporters of reversing the change argue this effectively taxes income that was never earned.

Nevada Democrat Dina Titus has led the push to roll back the deduction reduction, testifying before the House Rules Committee and claiming bipartisan support for the effort. She and her allies contend the policy disproportionately impacts professional gamblers and recreational bettors alike, particularly in states with large gaming industries. Critics on the right note that these objections come after Democrats supported the broader reconciliation bill that introduced the change in the first place.

Representative Steven Horsford of Nevada also backed restoring the previous deduction standard, joining with Republican Representative Max Miller of Ohio on a bipartisan proposal. Horsford described the bill as a narrow fix intended to return tax policy to its prior form. House Rules Committee leaders, however, declined to advance the amendment, effectively blocking its inclusion in the final funding package.

From a fiscal perspective, conservatives have warned that last-minute provisions buried in massive bills often escape proper scrutiny, leading to unintended consequences that later require legislative cleanup. While Democrats now argue the gambling tax change could drive bettors toward offshore markets, critics say the situation underscores the risks of expansive spending packages that rewrite tax policy without transparency or accountability.

With the amendment sidelined, the reduced deduction remains in effect, at least for now. Lawmakers supporting a rollback say they will continue pressing the issue, though the episode serves as another reminder of how difficult it can be to reverse policies once they are embedded into federal law.

Source. KSNV News 3.