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The House Ways and Means Committee advanced a bipartisan crypto tax bill that includes a reversal of the gambling-loss deduction limit enacted in the One Big Beautiful Bill. Punchbowl News reported that the measure would restore the full deduction for gambling losses after the earlier law reduced the amount gamblers could report against winnings from 100% to 90%.
The committee action gives the proposal a legislative vehicle, but it does not settle the issue. Punchbowl’s related coverage says momentum to reverse the gambling tax change has stalled at points and that opportunities to attach a fix to moving legislation are limited. The gaming lobby’s caution reflects the distance between committee approval and enactment.
Stakes Framing
The practical effect of the 90% limit is illustrated by a gambler who wins $100,000 and loses $100,000 during the same tax year. Under the reduced deduction, only $90,000 of those losses could be offset, potentially leaving federal tax due on $10,000 despite the gambler having broken even. The Las Vegas Sun described this result as a phantom-income problem because part of the losses remains nondeductible even when winnings and losses match.
The dispute is therefore about more than a technical adjustment to tax reporting. The prior rule allowed gamblers to deduct losses up to the amount of their winnings, so tax applied to net gains rather than to an amount left over after the deduction cap. Restoring the full deduction would return that approach for wagering losses, while leaving the basic limit that deductions cannot exceed winnings in place.
What the reversal would actually do
The legislation approved by the committee is the Digital Asset Tax Certainty Act. According to the Las Vegas Sun, it includes language intended to preserve a 100% deduction for wagering losses and eliminate the current 90% limitation. The gambling provision was added to the broader crypto tax package rather than advancing as a standalone gambling bill.
That structure matters because the bill’s central subject is digital-asset tax policy, while the gambling provision is one element of a larger legislative package. Punchbowl’s preview similarly identified the deduction reversal as an unexpected addition to the bipartisan crypto measure. For gamblers, the intended effect is direct: losses could again be fully deducted against winnings, up to the amount won.
The Las Vegas Sun reported that the proposal would apply to taxable years beginning after Dec. 31, 2025, providing relief for 2026 if enacted. The same report said the measure also seeks to prevent a further reduction in the deduction cap from taking effect in 2027. Those details remain part of a bill that has cleared committee, not a change that has already become law.
Why the gaming lobby is hedging its bets
Committee approval is a meaningful step, but Punchbowl’s related coverage emphasizes that the path for a reversal remains constrained. Congress has limited time before the end of the year, according to that coverage, and other tax-policy priorities are competing for legislative attention. A provision can have bipartisan support in committee without receiving a prompt vote in the full House or completing the Senate process.
The current effort also follows earlier attempts to undo the deduction limit. The Las Vegas Sun reported that Rep. Dina Titus of Nevada introduced an initial legislative fix 14 months before the committee action, but that earlier effort did not become law. The report said the House Rules Committee declined to advance the FAIR BET Act as an amendment to the fiscal year 2026 National Defense Authorization Act, leaving the 90% cap in place.
Another measure, the FULL HOUSE Act, later supplied the language incorporated into the Digital Asset Tax Certainty Act, according to the Las Vegas Sun. That legislative history helps explain why supporters are treating the committee vote as progress rather than a final resolution. The proposal still must move through the remaining stages of Congress before taxpayers can rely on a restored deduction.
How the fight got here
The One Big Beautiful Bill reduced the gambling write-off from 100% to 90%, reversing a longstanding approach that allowed losses to offset winnings in full. Punchbowl’s preview confirms that the earlier law lowered the amount of losses gamblers could report against winnings. The reduction created the central issue now being addressed by the committee-approved bill.
The Las Vegas Sun reported that the Ways and Means Committee voted 38-5 to advance the Digital Asset Tax Certainty Act with bipartisan support. Several Democrats supported the compromise while noting that some issues were not completely resolved, according to the report. The vote represents the first major committee action on legislation to restore the full gambling-loss deduction since the reduction was enacted.
The Sun also reported that the FULL HOUSE Act was introduced by Rep. Max Miller of Ohio and Rep. Steven Horsford of Nevada. Its language, rather than the earlier FAIR BET Act, was ultimately folded into the crypto tax legislation. The amendment process shows how the deduction issue moved from standalone proposals into a broader bill capable of receiving committee consideration.
What it means for gamblers
For taxpayers who report both gambling winnings and losses, the difference between a 90% deduction and a full deduction can be substantial. Under the cap, a person who breaks even across the year may still have taxable income because 10% of losses cannot be used to offset winnings. Under the proposed restoration, losses could again offset winnings in full, though only up to the amount of winnings.
The policy debate centers on whether federal tax law should treat a gambler who has no net gain as having taxable income. Supporters of the reversal argue that the 90% limit produces tax liability on money the taxpayer did not retain. The committee measure is designed to remove that limitation, but the existing cap remains the operative rule unless Congress completes the legislation and it becomes law.
What comes next
The committee vote sends the Digital Asset Tax Certainty Act to the full House, according to the Las Vegas Sun. Passage is not guaranteed, and the bill would also require Senate action before the gambling-loss deduction change could take effect. Punchbowl’s reporting on limited legislative opportunities and competing tax priorities provides a reason for continued caution about the timing of any final action.
Until then, the central facts of the debate remain unchanged: the One Big Beautiful Bill reduced the deduction for gambling losses from 100% to 90%, and the committee-approved measure would restore the full deduction up to winnings. The House panel’s action has advanced that effort, but it has not yet resolved the federal tax treatment of gambling losses.
The post Crypto Tax Bill Could Restore Full Gambling-Loss Deduction appeared first on ReadWrite.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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