A change in the 2025 tax law means gamblers can now deduct only 90% of their losses. The practical effect is that you can owe federal tax even in a year you broke even. A bipartisan bill, the FULL HOUSE Act, wants to undo it. Here’s what changed and where the fix stands.
What changed
The One Big Beautiful Bill (P.L. 119-21) capped the wagering-loss deduction at 90% of losses. Before that, you could deduct losses up to the full amount of your winnings, so a break-even year meant no tax on the wagering. Under the 90% cap, 10% of your losses no longer count, which can leave you taxed on “phantom” income, money you won on paper but gave right back.
Here’s the arithmetic. Say you win $100,000 and lose $100,000 in the same year. You netted zero. Under the old rule you deducted the full $100,000 and owed nothing on the wagering. Under the 90% cap you can deduct only $90,000, leaving $10,000 of taxable “winnings” you never actually kept.
The proposed fix
The FULL HOUSE Act, short for Facilitating Useful Loss Limitations to Help Our Unique Service Economy, would restore full 100% deductibility of wagering losses up to winnings. Representatives Max Miller and Steven Horsford introduced the House version (H.R. 6985), and Senators Catherine Cortez Masto and Ted Cruz introduced a companion (S. 2230). It’s a bipartisan effort. Introduced in January 2026, the bill remained pending in the tax-writing committees as of this review, so the 90% cap remains in effect.
What to do now
- If you or your clients have significant wagering activity, plan around the 90% cap for 2026. It’s the current rule.
- Don’t count on the fix passing. Bills like this can stall; treat repeal as possible, not scheduled.
- Keep clean, contemporaneous records of wins and losses. The cap makes accurate loss substantiation matter more, not less.
- Work through the numbers with a tax professional before year-end, especially for high-volume or professional-level play.
This is where BCA’s gaming and tax work meet, and it’s the kind of question we field on our Gaming Compliance side. We help operators and their higher-volume customers understand rules like the 90% cap and coordinate with a tax professional when the personal numbers need individual advice. BCA doesn’t provide licensed tax advice itself; we bring in the right licensed professional when it’s needed.
Educational information only, not licensed legal, tax, or financial advice. We refer to and partner with licensed professionals when personalized advice is needed. Laws change; no warranty of accuracy or timeliness.