Why Some Republicans Are Fighting to Repeal the Gambling Tax Hike from Trump’s Major Legislation

Some Republican lawmakers are second-guessing a tax increase on gamblers that was included in a major bill pushed by former President Donald Trump. This tax change reduces the deduction gamblers can take for their losses from 100% to 90% starting in 2026. This shift means bettors could owe taxes even in years when they break even.

For example, if a bettor wins $100,000 and loses the same amount, they would still face taxable income of $10,000. Jack Andrews, a professional sports bettor, warns that this could hurt the gambling industry, particularly high-volume players. “They keep casinos running,” he says. If these players start to see their winnings as “paper income” that they can’t offset with losses, they might stop betting altogether.

The nonpartisan Congressional Budget Office projected that this change would raise $1.1 billion over ten years. However, this has not come without backlash. Senators like Ted Cruz and Bill Hagerty have joined forces with two Democratic senators from Nevada to propose reversing this tax through the FULL HOUSE Act. Cruz criticized the tax provision, saying it unfairly taxes income that hasn’t actually been realized.

The inclusion of this tax provision happened quickly, and many lawmakers claim they weren’t even aware it existed. Cruz noted, “Nobody really takes responsibility for introducing it. None of us knew about it.”

The legislation that introduced this tax was crafted in mid-June, with Senator Mike Crapo overseeing the financial aspects. His office is open to discussing feedback to potentially change the tax’s impact.

The uproar from gamblers has been significant since Trump signed the bill into law on July 4. Nevada’s economy, heavily reliant on gambling revenues, could suffer if this tax stays in place. Senator Catherine Cortez Masto has highlighted the harm that this tax can inflict on Nevada and has indicated she’ll keep pushing for changes.

Interestingly, a lot of gamblers might not realize how this change impacts them until they file their taxes in 2027. If lawmakers don’t act to reverse this tax change, it could take many by surprise.

Senate Majority Leader John Thune has expressed skepticism about the chances of amending the bill, stating, “This was a big piece of legislation…Not everybody got everything they wanted.”

The reaction from the GOP has been mixed. While some lawmakers are calling for changes, others like Rep. Vern Buchanan say they haven’t looked into the situation thoroughly. Meanwhile, Senator John Cornyn seemed perplexed about the attention this tax has drawn, asking, “Why do so many people care about the gamblers tax?”

As discussions around this tax continue, the sentiments in the gambling community remain high. Player reactions on social media underscore a concern that high-stakes betting might become less appealing, resulting in a decrease in casino revenues. The debate is likely to continue as more lawmakers weigh in.



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