The discussion surrounding the gambling tax change in the Big Beautiful Bill is far from over.
It resumes Friday when the House Ways and Means Committee holds a field hearing in Las Vegas at 10 a.m. local time. This hearing is expected to delve into the implications of the newly enacted “One Big Beautiful Bill” (OBBB), which has sparked considerable debate, particularly within the gambling community.
The focus of this hearing is to explore the impacts of the controversial tax changes introduced by the OBBB. While the hearing will feature testimony from invited witnesses, the public is encouraged to attend and submit written statements that will be included in the committee's official record.
The meeting provides a platform for concerned voices to weigh in on how the bill affects Nevada's gaming industry and beyond.
Big Beautiful Bill's Key Change: Gambling Loss Deductions
A major point of contention is a new rule starting January 1, 2026.
The OBBB mandates that gamblers can only deduct 90% of their gambling losses on federal income taxes, down from the full 100% previously allowed. This change means that if someone wins and loses an equal amount, they will still owe taxes on 10% of their income—a situation critics call "phantom income."
The proposed deduction limit would extend to non-loss expenses, such as subscriptions to data services essential for their business, which are currently subject to different tax rules. Phil Galfond, a professional poker player, has expressed concerns, stating this amendment could end professional gambling in the U.S. and negatively impact casual gamblers.
Galfond also pointed out that for professional poker players, travel, coaching, and software are lumped into the “loss” bucket and still subject to the 90% cap.
But one thing people seem to like about the Big Beautiful Bill is that it also increased the threshold for reporting slot machine winnings to the IRS.
Lawmakers and Poker Players Push Back against OBBB
Rep. Dina Titus is expected to use this hearing to champion the FAIR Bet Act (HB 4303), which she introduced on July 7. It even has its own account on X.
The act seeks to repeal the deduction limit and restore the full 100% deduction for gambling losses. Although the FAIR Bet Act has bipartisan backing, it has yet to be scheduled for a hearing in the current Congress, led by Republicans.
The deduction change was added late in the legislative process to enhance the budgetary impact, anticipating $1.1 billion in revenue over a decade. However, many, including gamblers, casino operators, and the American Gaming Association, argue that this provision unfairly taxes money never actually earned and could potentially drive gambling activities underground.
For Nevada, where the gaming industry plays a vital economic role, the implications of the OBBB are particularly significant.
Rep. Titus and other stakeholders are strongly advocating for the FAIR Bet Act, hoping to protect Nevada’s economic interests and the livelihoods tied to the gaming sector.
What's at Stake During the Las Vegas Hearing?
As the field hearing unfolds, it will provide critical insight into the perspectives of industry experts, lawmakers, and community members. While the future of the FAIR Bet Act remains uncertain, the discussions in Las Vegas could play a pivotal role in shaping its trajectory.
The Las Vegas field hearing represents a crucial moment for stakeholders to voice their concerns and influence the discourse surrounding the One Big Beautiful Bill.
