Third Bill Introduced to Restore Full Gambling Loss Deduction

A new effort to reverse the controversial gambling loss deduction cap has surfaced in the US House of Representatives. Rep. Andy Barr (R-KY) filed the WAGER Act (HR 4630) on July 23, making it the third federal bill aiming to restore the 100% deduction on gambling losses, and the first led by a Republican.

The WAGER Act stands for “Winnings and Gains Expense Restoration Act of 2025.” It aims to repeal a highly criticized Senate provision in the recently enacted “One Big Beautiful Bill Act” (OBBBA). That provision reduces the maximum deduction for gambling losses from the current 100% (up to the winnings) to 90%.

Critics argue that the 10% reduction means that many gamblers would need to pay taxes even if they don’t make a profit. The change, set to take effect in 2026, has drawn significant backlash. That includes gamblers, tax professionals, and lawmakers on both sides of the aisle, many of whom say they were unaware of the provision.

Barr Joins Push to Repeal OBBBA Gambling Provision

Rep. Barr, who chairs the Congressional Horse Caucus, represents Kentucky, a state with deep ties to horse racing. He emphasized that the WAGER Act would benefit both bettors and the horse racing industry:

“Restoring full deductibility of wagering losses will help the thoroughbred horse racing industry maximize economic value for equine businesses.”

“I’ll work to deliver the WAGER Act in Congress and appreciate the work of equine and thoroughbred horse racing advocates in fighting for this bill alongside me.”

HR 4630 has been referred to the House Ways and Means Committee. There, it joins a Democratic-led effort introduced by Rep. Dina Titus (D-NV).

Third Bill, First GOP-Led Effort to Repeal the Provision

The WAGER Act follows two other attempts led by Nevada Democrats:

• The FAIR BET Act (HR 4304), introduced on July 7 by Rep. Titus, was the first legislative response to the OBBBA gambling cap. Titus, a longtime gaming advocate, said the rule disproportionately harms Nevada’s economy and everyday gamblers.
• The FULL HOUSE Act (S 2230), introduced by Sen. Catherine Cortez Masto (D-NV), is the Senate counterpart but has faced procedural hurdles.

Both the WAGER Act and the FAIR BET Act currently sit in the House Ways and Means Committee. While the committee has yet to schedule a hearing, Rep. Titus took the opportunity to raise the issue during a recent “field hearing” in Las Vegas, hosted by Committee Chair Jason Smith (R-MO).

Although Titus is not a member of the committee, Smith invited her as the hearing was in her district. The Committee Chair, in response, pledged to work with Republicans and Democrats to reverse the change in the gambling tax.

Senate Bill Stalls Despite Bipartisan Support

Meanwhile, the Senate effort has stalled. On July 10, Mastro attempted to pass her legislation using a unanimous consent procedure. That’s a procedural move that requires no objections to pass.

Despite bipartisan support, Sen. Todd Young (R-IN) objected, effectively blocking the bill from advancing. As it failed to advance with unanimous consent, the FULL HOUSE Act was assigned to the Senate Finance Committee.