Congress Advances Horseplayer-Friendly Tax Legislation

A bill that includes an industry-backed provision that would restore horseplayers' ability to claim 100% of their losses against any gambling winnings in tax filings took a step forward Sept. 16. The House Ways and Means Committee advanced the Digital Asset Tax Certainty Act (H.R. 10357) by a bipartisan vote of 38-5, sending the bill to the full House. H.R. 10357 includes the bipartisan Full House Act, championed on both sides of the political aisle by Reps. Steven Horsford, a Nevada Democrat, and Max Miller, an Ohio Republican. The provision would reverse the current 90% limitation on wagering-loss deductions and restore the longstanding rule allowing taxpayers to deduct wagering losses up to the amount of their winnings in determining any gambling income. In July, the National Thoroughbred Racing Association tied reduced handle this year to the tax-rule changes and, in a letter to United States Treasury Secretary Scott Bessent, requested the Treasury and Internal Revenue Service back legislation that would restore the gambling loss provision to its previous level. Legislation that went into effect this year lowered the percentage of gambling losses a taxpayer could report against their winnings from 100% to 90%. READ: NTRA Calls for Restoring Full Deduction on Winnings That marked a significant change from the prior standard. Through 2025, if a bettor had $10,000 in reported gambling winnings, they could report up to $10,000 in losses against those winnings. A player with $10,000 in winnings and $10,000 in losses would have no taxable income from gambling winnings. Under the current standard, that same player would have to report $1,000 in gambling winnings as income because they could only report 90% ($9,000) of their losses. The change to the 90% standard took effect this year as part of the One Big Beautiful Bill Act, which was signed into law July 4, 2025. Congress included the change as a way to offset lost revenue from other tax reductions. In a release Wednesday, Horsford said the bill would modernize the tax code, support innovation, and strengthen tax fairness. "People deserve a tax code that is fair, understandable, and keeps pace with how they live and work," Horsford said. "Americans who use digital assets need clearer rules and greater certainty. This agreement makes progress while strengthening safeguards to prevent abuse." The legislation applies established tax principles to digital assets, clarifies ordinary-income treatment for mining and staking rewards, and establishes clearer rules for digital asset transactions. Horsford helped shape the agreement through sustained negotiations with colleagues across the aisle. "America should lead in innovation, and the opportunities it creates should reach working people and entrepreneurs," Horsford said. "I stayed engaged to make this legislation stronger and support responsible growth, protect tax fairness, and give taxpayers rules they can understand and follow. We found common ground and moved a bipartisan agreement forward."