Senate Republicans block attempt to roll back massive tax hike on professional gamblers

Yahoo

a day ago

WASHINGTON (AP) — Senate Republicans on Thursday blocked an attempt to reverse a little-noticed provision from their tax and spending cuts law that professional gamblers warn could be the end of their industry.
Democratic Sen. Catherine Cortez Masto of Nevada sought unanimous passage of a bill that would roll back the change on gambling tax deductions, but Republican Sen. Todd Young of Indiana objected, stalling the proposal for now.
The emerging fight over the gambling provision is likely only the beginning of the fallout from the new tax law and its impact on the country. Spanning more than 900 pages, the bill signed into law by President Donald Trump last week contained a slew of provisions changing federal programs and the tax code, many of which lawmakers admit they are only now beginning to fully digest.
'My understanding is many Republicans, many Democrats did not even know it was part of that process,' Cortez Masto said of the gambling provision.
Under the new tax law, starting in 2026, individuals can only deduct 90% of their gambling losses up to the amount of their winnings. That's a change from the previous rule, which allowed gamblers to deduct 100% of their losses, up to the amount they won.
The change will only significantly impact those who gamble larger amounts and who take the extra steps to itemize and deduct their losses. But for those individuals, the impact could be steep.
In practice, for example, under the old rule, someone who wins $100,000 and loses $100,000 could deduct the full $100,000 in losses and owe nothing. Under the new rule, they would only be able to deduct $90,000 and would still owe taxes on the remaining $10,000, despite having lost all their winnings.
'This new amendment to the One Big Beautiful Bill Act would end professional gambling in the U.S. and hurt casual gamblers, too,' Phil Galfond, a professional poker player, said on social media just days ahead of the bill's final passage.
The provision was included in the bill's text released on June 16 by Senate Finance Committee Chair Mike Crapo. Some senators have said they weren't aware of the provision, and it only publicly came to light days ahead of the bill's passage, with professional gamblers and media figures drawing attention to it.
'Now I see Republican senators walking all over the Capitol saying they didn't even know anything about this policy," said Sen. Ron Wyden, the top-ranking Democrat on the Senate Finance Committee.
'The fact is, when you rush a process like this, this way, and cram in all of these policies that you haven't really thought about, you risk consequences for people back home. That is what is going on here,' Wyden. said
The provision is estimated to generate over $1.1 billion in tax revenue over eight years. The entirety of the tax break and spending cuts bill will increase the deficit by nearly $3.3 trillion from 2025 to 2034, according to the nonpartisan Congressional Budget Office.
Republicans say it was a necessary procedural change tied to the reconciliation process, which allowed them to pass the sweeping bill without Democratic support.
Young, the Indiana Republican who objected to Cortez Masto's bill, said he supports the policy but would only agree to undo it if Democrats accepted other provisions in return.
'I strongly support the underlying bill, but will have to object unless you can agree to my request,' Young said on the Senate floor.
Thursday's attempt by Cortez Masto won't be the last. On Wednesday, she introduced a bill that will first have to go through committee, but has bipartisan support, to restore the full gambling deduction. In the House, Nevada Democratic Rep. Dina Titus has also introduced a bill attempting to return to the previous standard.
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