House Republicans claim that Rep. Dina Titus' (D-NV) attempt to insert pork in the defense budget bill by restoring the 100% tax credit for gambling losses would not be included in the final version.
Titus' proposed tack-on to the 2026 National Defense Authorization Act (NDAA) was rejected by the House Rules Committee this week. In August, Titus declared her intention to restore the 100% deduction for gambling losses in the Senate-passed military budget measure.
The Fair Accounting for Income Realized from Betting Earnings Taxation Act, or FAIR Bet Act, was created by Titus. The federal law, House Resolution 4304, aims to repeal a provision of the Republican-passed One Big Beautiful Bill (OBBA), which President Donald Trump signed into law in July.
The OBBB would reduce the percentage of gambling losses that an individual filer could deduct from their gaming earnings from 100% to 90% starting with the 2026 tax year. This implies that a gambler would still be required to pay taxes on $5,000 if he won $50,000 during a tax year but also lost $50,000.
Titus Points the Finger at Republicans
Titus charged that the Republican Party was blocking the inclusion of the gaming tax clause in the defense budget.
"The GOP-controlled Rules Committee did not accept the FAIR Bet Act as an amendment to the NDAA. This was an easy fix that should have been adopted,” Titus said.
Before the GOP-led OBBA was approved by Congress, the 100% gambling loss deduction had been in effect for 70 years. The outcome, according to those opposed to the reduction, will unfairly penalize both professional and recreational gamblers and drive them to offshore, unregulated gaming websites.
“The result creates an unfair precedent by taxing phantom income and uniquely penalizing a legal, heavily regulated activity,” said Bill Miller, president of the American Gaming Association (AGA).
According to the Joint Committee on Taxation, during a ten-year period, the 90% gambling losses deduction would result in an additional $1.1 billion in federal tax collections.
$878.7 billion of the $924.7 billion in defense-related spending authorized by the US Senate's 2026 NDAA bill would go to the Department of Defense, which has been renamed the Department of War.
Every year, one of Congress' top legislative objectives is the NDAA. Through a follow-up measure, the Defense Appropriations Act, the bill gives Congress the power to allot funds to defense programs.
Titus' Battle Goes On
Las Vegas's attorney, Titus, said she will "keep building support to restore the 100% gambling loss deduction." The FAIR Bet Act lists eight Democratic signatories and four Republican cosponsors, demonstrating the Democratic congresswoman's existing strong bipartisan support.
Since its filing by Titus, FAIR Bet has remained with the House Ways and Means Committee, to whom it was referred on July 7.
Jason Smith (R-MO), the chair of the committee, has promised to take action on the measure. Smith said that the gambling losses deduction should be reinstated at 100% and blamed Senate Republicans for its inclusion.
