In its Nov. 26 legislative update, "What's Racing Through Washington," the National Thoroughbred Racing Association noted that there has been some progress for legislation that would restore the ability of taxpayers with gambling winnings to claim 100% of their losses against those winnings.
Currently 100% of such losses can be applied toward any reported winnings to determine the actual winnings for a taxpayer in a given year. But under President Trump's Big Beautiful Bill, changes would see the amount of gambling losses that could be claimed against winnings be reduced to 90% of losses. Currently this 90% deduction standard is scheduled to be in place for 2026.
The change is opposed by horse racing as well as other regulated gambling in the United States: casinos, sports betting, etc.
In its Wednesday release the NTRA noted some signs of progress:
One of President Trump's most prominent moves since returning to office has been the passage of the One Big Beautiful Bill Act, his big tax bill, on July 4th. As previously mentioned, the bill included several wins for the horse racing industry, namely 100% permanent bonus depreciation. It also included a bane for the industry—the decrease of the tax deduction on gambling losses from 100% to 90%.
This change drew immediate criticism from the public as well as from lawmakers from both parties, mainly for the fact that this change would lead to gamblers potentially paying tax on "phantom income," that is, income that the gambler didn't actually earn.
Almost immediately, Rep. Dina Titus (a Nevada Democrat) introduced the FAIR BET Act, and Rep. Andy Barr (a Kentucky Republican) introduced the WAGER Act. Both of these bills will restore the tax deduction to 100%. As of now, the most likely bill that will pass is Barr's, simply because of the fact that he's a Republican in a Republican-controlled House and Senate.
There has been more good news regarding the WAGER Act and restoring the tax deduction.
First, House Ways and Means Committee chairman Jason Smith (Missouri, Republican) has come out in support of restoring the deduction, and Senate Finance Committee chairman Mike Crapo (Idaho, Republican) has indicated he's supportive of a change as well. Having both of these leaders in favor of restoration is a good sign.
Another good sign is the fact that multiple members of congress have signed on as co-sponsors of the bill, including Democrats. Having bipartisan support is always helpful to get a bill passed.
The NTRA has launched a campaign supporting the passage of the WAGER Act, including an ad that ran during the Breeders' Cup World Championships. More information on that campaign can be found here: Wager, NTRA
This press release has been edited for content and style by BloodHorse Staff.
