Efforts to repeal the so-called gambling “phantom tax” remain active in Washington, with the Full House Act now emerging as the latest bipartisan proposal aimed at restoring full loss deductions.
The issue has drawn sustained attention since changes were introduced through last year’s One Big Beautiful Bill Act. Those changes, scheduled to take effect in the 2026 tax year, altered how gambling losses can be deducted and raised concerns across the poker and gaming community, including warnings that the rule could impact the careers of professional players such as Poker Hall of Famer Erik Seidel.
How the Phantom Tax Works
Before the rule change, gamblers could deduct 100% of their losses. A player who won $10,000 and lost $10,000 during the same year would break even and owe no federal tax.
Under the One Big Beautiful Bill Act, allowable loss deductions were reduced to 90%. Using the same example, only $9,000 of losses could be deducted, leaving $1,000 treated as taxable income despite not being retained. This outcome has been widely referred to as “phantom winnings.”
Why the Fair Bet Act Stalled
The Fair Bet Act, introduced by Nevada Congresswoman Dina Titus, was the first major attempt to reverse the rule before its 2026 implementation.
The bill was rejected by the U.S. House Rules Committee last September. More recently, it was again raised as a proposed amendment to a larger defense bill earlier this month, but was not adopted. The effort stalled again last week, leaving uncertainty over whether the 90% cap would remain in place.
Full House Act Takes Over
With the Fair Bet Act sidelined, attention has shifted to the Full House Act.
A Senate bill using the same name was introduced in July 2025 by Senator Catherine Cortez Masto of Nevada, but that effort was swiftly blocked. The current version is being advanced in the House as an amendment to a legislative minibus discussed this week by the House Rules Committee.
Supporters cite bipartisan backing and the inclusion of a co-sponsor from a non-gaming state as factors that may improve its prospects. If enacted, the bill would restore the full deduction of gambling losses.
The House effort is led by Nevada Congressman Steven Horsford and Ohio Congressman Max Miller, both members of the House Committee on Ways and Means. Miller has said the legislation is intended to ensure basic fairness in the tax code, arguing that Americans should not be taxed on money they did not actually take home.
Legislative Timeline
| Timeframe | Measure | Action | Outcome |
|---|---|---|---|
| July 2025 | Full House Act (Senate) | Introduced | Blocked |
| Last September | Fair Bet Act | House Rules Committee review | Rejected |
| Earlier this month | Fair Bet Act | Proposed as defense bill amendment | Not adopted |
| Last week | Fair Bet Act | Further consideration | Stalled |
| This week | Full House Act (House) | Minibus amendment | Under review |
What Comes Next
According to Fairplaygov, supporters hope the bill can advance under closed rules, limiting debate and amendments, or through a self-executing rule that would allow passage without a separate vote. The group has described the proposal as a bipartisan technical correction with limited budgetary impact.
