WAGER Act Aims to Restore Full Gambling Loss Deduction

Representative Andy Barr introduced the WAGER Act on July 23. It would restore prior wagering loss limitation rules. The bill mirrors the FAIR BET Act and FULL HOUSE Act. It would reverse the OBBBA's 90 percent cap on deduction for gambling losses. Unlike OBBBA, WAGER restores full deductibility up to the amount won. Thus gamblers could once again deduct 100 percent of losses against winnings.

The House Ways and Means Committee received Barr's bill HR 4630. He filed it two days before a Las Vegas hearing on OBBBA. Meanwhile, the FAIR BET Act by Rep. Dina Titus and the FULL HOUSE Act by Senator Cortez Masto remain under consideration.

Supporters argue the WAGER Act brings fairness back to federal gambling taxation. For example, under current law a gambler could owe taxes on phantom income. That occurs when losses match winnings but only 90 percent of losses qualify. By contrast, WAGER would eliminate that gap. It would protect recreational and professional bettors alike.

Potential Effects on Online Casinos and Sportsbooks

Furthermore, the WAGER Act could impact online casinos and online sportsbooks. If the WAGER Act passes, online casinos and sportsbooks would benefit from restored confidence in tax fairness. It would encourage platform transparency and compliance.

Horse racing betting advocates also back the bill strongly. Barr emphasized that full deductibility enhances economic value for equine businesses. Industry figures like Tom Rooney and Damon Thayer echoed that support during statement releases .

Meanwhile, Ways and Means Chair Jason Smith signaled bipartisan willingness to address the deduction cap. At the field hearing he pledged to work across aisles for a solution before the January 1 effective date.

Working Against the Clock

As legislative momentum builds, Congress faces a tight schedule. Resolution would need to occur before the cap takes effect on January 1, 2026. Otherwise taxpayers face higher liabilities despite breaking even.

The WAGER Act represents a third legislative attempt to restore full loss deductions. If successful, it could reshape tax treatment for gamblers nationwide and reinforce integrity in real money online casinos and online sportsbooks.