Congress advised to abolish tax breaks for gambling by a group supported by Mike Pence
In a recent move, the Advancing American Freedom (AAF) group, led by former Vice President Mike Pence, has called on federal lawmakers to eliminate tax deductions for gambling losses. The AAF argues that the current tax code encourages gambling and rewards unproductive behavior, as nearly all gamblers lose money, leading to financial, health, and family problems.
The AAF's position is that taxpayers should not subsidize gambling through tax deductions. They believe that removing these deductions would reduce gambling participation, which they see as a public good. Under their proposal, gamblers would owe taxes on all winnings regardless of losses, increasing tax revenue and potentially discouraging gambling.
On the other side of the debate, Congresswoman Dina Titus and other lawmakers oppose eliminating or reducing these deductions. Titus introduced the FAIR BET Act, which aims to restore the full 100% deduction for gambling losses (currently capped at 90% due to the One Big Beautiful Bill Act). Opponents like Titus argue that limiting or removing deductions is unfair because it results in gamblers being taxed on net-zero profits.
For instance, a gambler who wins $100,000 and loses $100,000 would still owe tax on the difference if losses are capped or disallowed, effectively taxing on phantom earnings. Critics warn this could push gamblers toward unregulated markets and increase the financial burden on legal bettors.
Summary of Positions
| Argument | Advancing American Freedom (Pence-Backed) | Dina Titus & Supporters | |-----------------------------------------------------------|-------------------------------------------------------------|--------------------------------------------------------------| | Gambling loss deductions encourage gambling | Yes; tax code encourages unproductive behavior and harms | No; deductions should be fully allowed to reflect net losses | | Taxpayers should not subsidize gambling | Yes; removing deductions prevents taxpayers from footing bill| No; deductions are fair to prevent taxation on net loss | | Effect on gambling behavior | Removal will reduce gambling participation and related harms | Limiting deductions increases costs for legal gamblers | | Fairness for gamblers with equal wins and losses | Deductions shouldn't exist; gamblers pay taxes on full winnings | Gamblers deserve full deduction to avoid paying taxes on no profit | | Legislative action | Push to eliminate deductions entirely | Fight to restore full 100% deduction via FAIR BET Act |
As the debate continues, it remains to be seen how federal lawmakers will address the issue of gambling loss tax deductions. The AAF's policy memo, sent to offices on Capitol Hill earlier this week, opposes three bipartisan bills that would restore the full 100% deduction for gambling losses. The fate of these bills and the future of gambling loss tax deductions remains uncertain.
[1] Advancing American Freedom Website [2] Dina Titus' Official Website [3] One Big Beautiful Bill Act [4] FAIR BET Act [5] Various Opponent Statements
The AAF (Advancing American Freedom) proposes to eliminate gambling loss tax deductions, viewing it as a potential discouragement for gambling and a means to prevent taxpayers from subsidizing unproductive behavior. On the contrary, Dina Titus and her supporters advocate for the restoration of the full 100% deduction for gambling losses, arguing that limiting or removing the deductions is unfair and could potentially drive gamblers towards unregulated markets.
