The Political Outlook on the Gambling Tax Rule

This is the question every active gambler in America is asking, and the honest answer as of May 2026 is: the political pressure for repeal is real and bipartisan, but the legislative path is uncertain. Three separate bills have been introduced to restore the 100 percent deduction: the FAIR BET Act in the House, the FULL HOUSE Act in the Senate, and the WAGER Act. All have bipartisan support. The American Gaming Association, the industry body representing major casino operators has lobbied actively for repeal. Nevada lawmakers from both parties have made the issue a priority. The Tax Foundation published an analysis arguing that the provision creates perverse incentives and may generate less revenue than projected if professional gamblers shift activity offshore or exit the regulated market.

The arguments against easy repeal are structural rather than political. The revenue the 90% rule generates was scored at $1.1 billion over ten years. Repealing it requires finding offsetting revenue elsewhere under budget rules, which is politically difficult even when there is consensus on the underlying policy. The Senate Republican caucus blocked the first repeal attempt in July 2025 not because of opposition to the repeal's goal but because of procedural complications around budget scoring.

President Trump made public comments in December 2025 suggesting openness to eliminating taxes on gambling winnings entirely- a comment that created significant speculation but no concrete legislative proposal. If such a change were enacted, it would obviously eliminate the 90% rule issue along with the broader taxation framework for gambling income.

The most likely outcome, based on the current state of play in Congress as of May 2026, is one of three scenarios: the 90% rule remains in effect for all of 2026 with repeal or modification coming in 2027 legislation; the rule is modified before year-end in some form (reducing the cap from 10% to something smaller, or creating exemptions for casual gamblers below a threshold); or the rule remains permanently for the foreseeable future if legislative action stalls completely.

Given this uncertainty, the only responsible guidance is to plan for compliance with the rule as it currently stands, document your gambling activity meticulously, and consult a qualified tax professional before filing your 2026 return. If repeal legislation passes before April 2027, it will be updated guidance. If it does not, you will be prepared.