Congresswoman Dina Titus of Nevada has hit a major obstacle in her push to reform federal gambling tax rules. The House Rules Committee has decided not to advance her Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR Bet) Act as an amendment to the National Defense Authorization Act (NDAA), delaying the bill’s progress.

The FAIR Bet Act seeks to undo a Trump-era change that reduced the allowable deduction for gambling losses from 100% to 90%. Starting in 2026, this would mean gamblers could face taxes on winnings even if their net result is zero — for instance, winning $50,000 but losing the same amount would still trigger taxation as if $5,000 were earned.

Titus, who represents Las Vegas, has called restoring the full deduction “a simple correction” and accused Republicans of blocking a fair fix for taxpayers. Despite the setback, the bill — which enjoys bipartisan support and backing from several lawmakers including House Ways and Means Committee Chair Jason Smith — remains under review.

Industry leaders, including the American Gaming Association, have warned that taxing so-called “phantom income” could push gamblers toward unregulated offshore markets, potentially hurting states reliant on casino revenue. The Joint Committee on Taxation estimates that keeping the cap could generate $1.1 billion in additional federal revenue over ten years.

This was Titus’ third attempt to move the legislation forward, using the NDAA — a $925 billion must-pass defense bill — as a vehicle. She has pledged to keep fighting, with expectations that the FAIR Bet Act will return to congressional discussions later this year.