The House Ways and Means Committee has approved legislation containing language that would preserve the 100% federal tax deduction for gambling losses, marking the most significant procedural progress yet on an issue that has hung over American poker players for more than a year.
The provision, backed by Nevada Representative Dina Titus, was included in the Digital Asset Tax Certainty Act and cleared committee in mid-September. It is designed to block a pending change that would cap the gambling loss deduction at 90% starting January 1, 2027.
Titus has called on House leadership to bring the bill to the floor without delay. It now requires a full House vote to advance further.
What the 90% cap actually does
The change originates in the tax package signed into law on July 4, 2025, which reduced the gambling loss write-off from 100% to 90% effective 2027.
The arithmetic is brutal for anyone playing at volume, and it is worth walking through slowly because the headline percentage understates the damage.
Under the current 100% rule, a player who wins $1,000,000 and loses $1,000,000 in a year has a net result of zero and owes no federal income tax on gambling activity. Losses fully offset wins.
Under the 90% cap, that same player can deduct only $900,000 of the $1,000,000 in losses. They are taxed on $100,000 of phantom income they never actually earned. At a 24% marginal rate, that is a $24,000 federal tax bill on a break-even year.
Scale that to a professional's real volume and the problem becomes existential. A high-volume tournament player or online grinder can easily cycle several million dollars through wins and losses in a year while netting a modest profit. Under a 90% cap, the tax owed can exceed the actual profit.
Industry estimates put the aggregate cost to gamblers at around $2 billion.
Why poker is hit hardest
Not every form of gambling is affected equally, and poker sits at the worst end of the distribution.
The gross wins and losses reported for poker are enormous relative to net results. A cash game player who sits down 300 times a year books 300 separate sessions, many winning and many losing. A tournament player who fires 500 bullets books 500 losses and a handful of wins, some of them large. The gross figures dwarf the net.
Sports bettors and casino players face the same mechanism, but poker's specific combination of high volume and thin margins makes it the most exposed. A recreational slots player who loses $2,000 over a year is barely affected. A professional whose gross wins and losses each run into seven figures faces a tax bill on income that does not exist.
There is a second-order effect that matters for the wider ecosystem. If professionals cannot play profitably at volume, they play less. Fewer regulars means thinner games, worse liquidity and a smaller overall market — which ultimately reduces the tax base the change was designed to expand.
Where the bill stands
Titus originally introduced the bipartisan FAIR BET Act in July 2025, shortly after the reduction was enacted, and has pursued multiple legislative routes since.
The September committee approval is the furthest the fix has advanced. Attaching the language to the Digital Asset Tax Certainty Act — a broader tax bill with its own constituency and momentum — is a pragmatic tactic. Standalone bills on narrow gambling issues rarely reach the floor. Provisions riding on larger vehicles frequently do.
That said, committee approval is not enactment. The bill must pass the full House, then the Senate, then be signed. The deadline is real: without action, the 90% cap takes effect on January 1, 2027.
Nevada's congressional delegation has pushed the issue hardest, for obvious reasons, but the coalition is broader. The change affects players in every state with legal gambling, and the professional poker community has been unusually organised in lobbying on it.
What players should do now
Nothing has changed for the 2026 tax year. The 100% deduction remains in force for the year currently in progress. The cap, if it survives, applies to 2027 and beyond.
That gives players a window, and a few things are worth attending to regardless of how the legislation resolves.
Keep proper records. Session-by-session logs of date, location, game, buy-in and result are the foundation of any gambling tax position. If the 90% cap does take effect, accurate records become more valuable, not less, because the deduction you can claim depends entirely on documented losses. Players who have been casual about record-keeping should fix that now.
Understand the professional versus recreational distinction. Players who qualify as professionals file differently, on Schedule C, with a different treatment of expenses. Whether that status is available to you depends on facts and circumstances that are specific to your situation.
Do not make irreversible decisions on an unresolved bill. The fix has cleared one committee. It has not passed. Restructuring your affairs around an outcome that has not happened is premature.
We are not tax advisers and this is not tax advice. Anyone whose poker income is material should talk to an accountant with specific experience in gambling taxation — the rules are genuinely idiosyncratic and general practitioners often get them wrong.
The wider regulatory picture
The deduction fight sits alongside a broader set of live issues for US players. State-level online poker remains limited to a handful of regulated markets, sweepstakes gaming is being restricted in a growing number of states, and prediction-market operators are testing the boundary between event contracts and gambling.
For players weighing where and how to play, our US poker sites guide covers the current regulated landscape, and our safe poker sites guide explains how to assess an operator's licensing position. Players operating across borders may also find our Canada and UK pages useful for comparison.
What this means for players
The single most important takeaway is that this is not settled. A committee vote is meaningful progress on an issue that looked stalled for months, and the tactical decision to attach the language to a larger tax bill improves its odds considerably. But the January 2027 deadline is fifteen months of legislative calendar away and the bill has several stages left.
For now: 2026 is unaffected, records matter more than ever, and the outcome is worth following closely if any meaningful part of your income comes from the felt.
Sources: Las Vegas Review-Journal, SBC Americas, Fox5 Vegas