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Nevada’s gaming industry and congressional delegation are trying to introduce a federal tax change that, starting in 2026, would prevent gamblers from fully offsetting winnings with losses. On the other hand, operators warn that such an outcome could chill high-volume play and large-event travel.
Under the new federal rule, individuals will be able to deduct only 90% of gambling losses up to the amount of their winnings, replacing the long-standing standard that allowed 100% of losses to be deducted (up to winnings).
A “break-even” year could still create taxable income
For the market, the cap can create taxable income even when a customer nets out flat over the year.
A 90% of gambling losses, with a simplified example of $50,000 in winnings and $50,000 in losses over a tax year, would be $45,000.
Under the previous standard, they would deduct the full $50,000 of losses and owe federal tax on $0 of gambling income. But with this new federal rule, they could deduct only $45,000, leaving $5,000 of taxable gambling income despite being financially even.
Nevada lawmakers and operators argue that such changes hit the exact segments that drive outsized handle and visitation: professional and semi-professional bettors, tournament poker players, and high-frequency customers whose play naturally produces large “winnings” and “losses” totals over time, even when the final result is close to break-even.
Lawmakers say that the change got into the bill in a way that surprised them
In Washington, the fight is also becoming a case study in how last-minute provisions in major tax packages can produce unintended industry impacts.
According to reporting cited by The Associated Press, the gambling-loss provision was included in text released June 16 by Senate Finance Committee Chair Mike Crapo, and some senators later said they were not aware it was in the package until shortly before final passage.
Sen. Catherine Cortez Masto (D-Nev.) said: “My understanding is many Republicans, many Democrats did not even know it was part of that process.”
Sen. Ron Wyden (D-Ore.), the top Democrat on Senate Finance, framed it as a consequence of a rushed process, saying: “Now I see Republican senators walking all over the Capitol saying they didn’t even know anything about this policy.”
Reversal efforts are moving, but the timeline is the problem
Nevada’s delegation is pushing multiple vehicles to restore the prior standard before the change takes effect in 2026, with parallel House and Senate efforts referenced.
But the short-term legislative reality has been messy. Several reports claim that a Senate attempt to quickly undo the change was blocked after Sen. Todd Young (R-Ind.) objected on procedural grounds while signaling conditional support. Young said on the Senate floor: “I strongly support the underlying bill, but will have to object unless you can agree to my request.”
For Nevada’s operators and suppliers, that “support, but not yet” posture is what keeps the issue alive: the change applies to the entire 2026 tax year, meaning uncertainty can shape behavior even if Congress later moves to fix it.
The revenue trade-off Congress is weighing
On the fair side, reports estimate the deduction cap will generate more than $1.1 billion in tax revenue over eight years, which is part of why it may be politically hard to unwind cleanly without finding offsets.
With that, a familiar legislative tension may unfold in the coming months: Nevada lawmakers and gaming executives view the rule as a competitiveness and integrity issue for a highly regulated industry, while budget writers can point to the provision as a measurable revenue raiser embedded in a much larger fiscal package.
