Ways and Means votes 38-5 to reverse the 90% gambling-loss cap retroactive to 2026

Limiting loss deductions to 90% of winnings taxes volume, whatever the player's profit. A player who wins $100,000 and loses $100,000 in the same year reports $10,000 of income under the cap, which the gaming industry calls phantom income ^[8]. Run the same break-even year at a million dollars of winnings against a million of losses and the reported income is $100,000, because the charge is a tenth of what came in the door ^[2].

The Joint Committee on Taxation scores the restoration at roughly $2 billion across 2027 to 2036 ^[5]. Crypto Briefing puts that at about $200 million a year and says Congress will have to find the money elsewhere or accept a slightly larger deficit ^[6][7]. Against $200 million a year: MGM Resorts, Caesars Entertainment and DraftKings all threw their weight behind the bill ^[10], and the sponsors are Rep. Dina Titus, a Nevada Democrat, and Sen. Ted Cruz, a Texas Republican ^[9]. Thirty-eight of the 43 votes cast in committee went for it, or 88% ^[1].

The bill it rides on could slow it down. The provision sits inside H.R. 10357, the Digital Asset Tax Certainty Act ^[3], so a casino and sportsbook deduction now depends on the pace of crypto tax legislation.

Crypto Briefing describes the original 90% cap as a revenue offset, written to make the broader bill's math work on paper, and reports that the gaming industry mobilised within months of the One Big Beautiful Bill Act's July 4, 2025 signing to undo it before it could bite ^[12][2]. Everything turns on the effective date. Because the restoration applies to tax years beginning after December 31, 2025 ^[4], the $2 billion that provision scored for last summer's legislation goes uncollected. So far that is one provision in one statute.

It all hinges on floor time. Gamblers file 2026 returns free of the cap only assuming the measure clears the full House and the Senate ^[13], and Crypto Briefing's account stops at the committee vote. Nevada, which collects no personal income tax and leans on gaming revenue to fund public services ^[11], has a direct interest in that floor schedule. So do the two sponsors, one of whom sits in the Senate that would have to take the bill up ^[9].

There is a case for calling this error correction: a cap that taxes money nobody pocketed is a drafting mistake, $200 million a year is cheap to fix, and 38-5 is what a committee does with one ^[1]. But the fix arrived before a single return was filed under the rule it repairs ^[4].