WASHINGTON – The massive tax and spending bill that President Donald Trump signed into law last week contains a provision limiting tax deductions for gambling losses that has professional bettors howling about being driven out of business.
The provision surprised many in the industry as well as numerous Republican senators involved in drafting the legislation, who told HuffPost they didn’t know how or why it was inserted into the bill. GOP lawmakers were under pressure to pass the bill by Trump’s self-imposed July 4 deadline.
“If you’re asking me how it got in there, no, I don’t know,” Sen. Chuck Grassley (R-Iowa) said during an interview on Tuesday.
“I don’t know anything about it. I’m not sure what it does,” Sen. John Cornyn (R-Texas) added.
Both GOP senators serve on the Senate Finance Committee, which crafted the tax provisions of the bill. The panel, which is led by Sen. Mike Crapo (R-Idaho), released the legislative language concerning the tax change weeks before the bill passed in the Senate. It went largely unnoticed until it was signed into law over the weekend.
Sen. Thom Tillis (R-N.C.), another member of the committee, called it “bad policy.”
“I was so focused on Medicaid, I wasn’t looking for other reasons to be against the bill. But that would be another one,” explained Tillis, who opposed the legislation due to its cuts to the Medicaid health insurance program.
Under the new law, gamblers will be allowed to deduct just 90% of their losses from their income taxes starting in 2026. Previously, they could deduct 100% of their losses. Now, for example, gamblers who win $100,000 but lose $100,000 – coming out even — would still be required to pay taxes on $10,000.
The provision is expected to hit professional bettors hardest, as they are the ones who place large amounts of bets.
“It pushes people into the black market if they don’t do regulated gaming because they have a tax disadvantage,” Rep. Dina Titus (D-Nev.) said during an interview on News Nation. “The black market doesn’t pay taxes, isn’t regulated, doesn’t help with problem gaming, so it’s bad for the industry, as well as for the player.”
The Democratic congresswoman from Las Vegas, home to the gaming industry, has introduced legislation that would repeal the provision. It has attracted several GOP co-sponsors.
Sen. Catherine Cortez Masto (D-Nev.) will also try to repeal the provision on the Senate floor this week, HuffPost has learned. The senator will ask for unanimous consent to pass her bill reversing the limit on tax deductions for gambling losses. Any one senator can object to such a request on the floor, however.
Repealing the tax deduction limit on gambling losses would come at a cost, however. The Joint Committee on Taxation, Congress’ nonpartisan scorekeeper, projected it would generate $1.1 billion in tax revenue over eight years.
A request for comment with a spokesperson for the Senate Finance Committee was not immediately returned.
It’s not the first time Republicans had trouble identifying what is in Trump’s so-called Big Beautiful Bill. GOP senators were also caught by surprise by a new excise tax for wind and solar projects that ultimately fell out of the legislative package. In May, one House Republican got an earful from his constituents when he admitted at a town hall he wasn’t familiar with part of the bill he had voted to pass just days earlier.