Sponsors (9)
The bill trades clearer, simpler tax rules and fewer abusive gambling deductions for reduced tax flexibility and higher tax bills for gamblers who previously offset wagering expenses against other income.
Taxpayers who gamble will have simpler, clearer federal tax rules because net wagering losses cannot exceed winnings, making wagering income and loss reporting more straightforward.
All taxpayers gain clearer tax administration and reduced opportunities for improper or abusive gambling-related deductions since deductions tied to carrying on wagering are explicitly treated as wagering losses.
Taxpayers who currently net business-style wagering expenses against other income (including some middle-class families) will likely face higher taxable income and larger federal tax bills.
Taxpayers who treat wagering as a business or incur significant gambling-related expenses will lose flexibility to deduct those expenses beyond their winnings, increasing the after-tax cost of gambling.
Based on analysis of 2 sections of legislative text.
Introduced July 9, 2025 by Catherine Marie Cortez Masto · Last progress July 9, 2025
Restricts how gambling losses are reported and deducted on federal tax returns by allowing wagering losses to be deducted only up to the amount of wagering gains and by treating business deductions tied to wagering activities as wagering losses. The change applies to taxable years beginning after December 31, 2025.