New Bill Proposes to Undo Change to New Tax Deduction Cap

One part of President Trump’s recently passed tax bill is already under fire.

Nevada US Representative Dina Titus (D-NV) has introduced the Fair Accounting for Income Realized from Betting Earnings Act (FAIR ACT) into the House. The bill proposes to eliminate a 90% tax deduction cap included in the President’s proposal, which was signed into law on July 4. The change is scheduled to take effect on January 1, 2026.

While most voters won’t be affected by the new tax change, it is expected to have a massive impact on professional and big-money bettors. 

"A pro who earns $200k/year with $3m in winnings and $2.8m in losses will be taxed as if they earned $480k, whereas previously they could deduct the full $2.8m in losses. Now, after the Republican tax penalty, they only would be left with 8k!" FAIR ACT co-sponsor Rep. Ro Khanna wrote on social media.

Rep. Titus, whose district includes Las Vegas, immediately called out the change after Senate Republicans added it to the tax bill proposal. The House was not allowed to vote on the change, leading the longtime lawmaker to propose the FAIR ACT just four days after the President signed the tax bill.

FAIR ACT Comes at Tough Time for Industry

While the FAIR ACT covers all forms of gambling, it may encounter resistance due to recent developments in the world of sports betting.

Last week, news broke that NBA guard Malik Beasley was under investigation for gambling violations. Less than a week later, the MLB announced an investigation into Cleveland Guardians pitcher Luis Ortiz. While neither star has been charged, the stories shed a public light on spot betting. This occurs when an athlete intentionally affects an aspect of the game without altering the outcome.

These accusations have once again raised questions about the integrity of US sports leagues. That could make it difficult for the FAIR ACT to garner the necessary support, potentially leaving the tax deduction cap in place.