Sen. James Lankford (R‑OK) has publicly opposed bipartisan legislation that seeks to restore a 100% deduction of gambling losses, a move that poses a significant hurdle to the proposal’s advancement. His resistance is among the first from a Senate Republican to confront this effort, which currently enjoys support in both parties and both chambers of Congress.
Lankford stated to Punchbowl News that the current policy, allowing only a 90% deduction, is “a pretty minor change in that tax policy.” His view contrasts sharply with concerns that the cap creates inequities in the tax code.
As of January 1, gamblers who itemize deductions can write off only 90% of their losses against their winnings. The remaining 10% is effectively taxed as income, even when no net profit exists.
For example, a player with $100,000 in wins and an equal amount in losses would still owe taxes on $10,000—income they never actually earned. This scenario has been described as taxing “phantom” income, raising fairness concerns among gamblers.
Representative Dina Titus (D‑NV) introduced legislation in the House to fix the deduction cap, backed by nearly two dozen cosponsors from both parties. A parallel measure, known as the FAIR BET Act, was also introduced by Rep. Andy Barr (R‑KY).
In the Senate, the FULL HOUSE Act, sponsored by Sen. Catherine Cortez Masto (D‑NV), aims to fully restore the deduction. Industry leaders and lawmakers expected swift action early in 2026, but the efforts have stalled.
Despite broad support from gaming-state lawmakers and industry groups, the bills haven’t advanced in Congress. Rep. Jason Smith (R‑MO), chairing the House committee overseeing them, has not scheduled hearings, and procedural delays persist.
In addition, efforts to attach the deduction reversal to larger legislative packages have failed. A unanimous consent motion in the Senate was blocked by objections, and committee resistance remains in place.
Stakeholders warn that the 90% cap may deter high-stakes gamblers from using legal casinos and sportsbooks. Some analysts predict this could result in billions of dollars in lost revenues—direct and indirect—for the gambling sector.
With Oklahoma housing the highest per-capita number of regulated gaming facilities in the U.S., Lankford’s backing of the cap introduces a local paradox: more betting locales, but potentially less incentive for serious gamblers.
Although lawmakers like Titus, Barr, Cortez Masto and Rep. Mark Amodei (R‑NV) continue to push for restoration, progress remains slow. Supporters remain hopeful but acknowledge that without Lankford’s support or a shift in Senate dynamics, policy reversal could be delayed into 2027 or beyond.
Ultimately, the future of the full deduction hinges on overcoming both procedural inertia and high-profile resistance—most notably from Sen. Lankford. Until that happens, gamblers will likely continue to pay income tax they didn’t truly earn.
