Democrats fail to reverse gambling taxation provision in the ‘big beautiful bill’
Republicans have blocked an attempt from Democrat senators to roll back the change to gambling losses' tax-deductibility status.
Key points:
– Senate blocks attempt to reverse new gambling taxation law
– In 2026, gambling losses will be changed from 100% to 90% tax deductible
– This amendment in the ‘big beautiful bill’ has proved unpopular with Democrats and professional gamblers
Donald Trump’s ‘big beautiful bill’ has been causing an ugly stir among professional gamblers and Democrat politicians in the US.
Pushback to the gambling losses taxation adjustment has been fierce and, as reported by the Associated Press, a flurry of activity in the Senate has seen Republicans block an attempt to renege on the new rule.
The original bill was signed into law last week and smuggled within it a gambling taxation adjustment that would require gamblers to pay 10% of the money they don’t win into the Federal Reserve.
This could see gambling profits for high-stakes players reduced to insignificant margins. It could even see them make losses after taxes, when they have made a profit with their yearly bets themselves.
It’s thought that the amendment pertaining to gambling losses went largely unnoticed by would-be opposers before it was passed.
“My understanding is many Republicans, many Democrats did not even know it was part of that process,” said Sen. Catherine Cortez Masto, who led the attempt this week with Nevada Representative Dina Titus to roll back the unpopular-in-some-quarters 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,” said Titus on July 7.
Good to know: President Trump’s ‘big beautiful bill’ was 900 pages long and related to tax and spending measures – Democrats were unanimously opposed but three dissenting Republican votes were not enough to block it
The rule change she wants to overturn will only affect players who gamble with larger amounts of money – winnings will remain 100% untaxed, with losses reduced to 90% tax-deductible status.
The law is due to come into effect in 2026, though there will likely be further dissent in the mean time and it seems the Republican Party is not united behind the policy.
“Now I see Republican senators walking all over the Capitol saying they didn’t even know anything about this policy,” said Sen. Ron Wyden.
Some Republicans have said that they largely agree with the counter-bill, but will want to see other Dem concessions in return if the law on gambling taxation is to be returned to the previous standard.
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