H.R. 4304: Fair Accounting for Income Realized from Betting Earnings Taxation Act

This bill, officially titled the "Fair Accounting for Income Realized from Betting Earnings Taxation Act" or the "FAIR Bet Act", proposes to modify the rules surrounding how individuals report their gambling losses on their tax returns.

Key Changes

• The bill specifically aims to amend Section 165(d) of the Internal Revenue Code of 1986.
• Currently, taxpayers can deduct only 90 percent of their gambling losses when reporting their income for tax purposes.
• If this bill passes, taxpayers would be allowed to deduct 100 percent of their gambling losses.

Impact of the Changes

By allowing a full deduction of gambling losses, the legislation would enable individuals who gamble to offset their taxable income more effectively. This means that if a person has substantial losses from gambling, they could reduce their overall tax liability significantly compared to the current limit of 90 percent.

Potential Tax Implications

The intended effect of the bill is to provide a fairer accounting framework for those who participate in gambling activities, allowing them to keep more of their winnings free from taxation if they incur losses. This change could affect various segments of the population, particularly those who regularly gamble, such as professional gamblers or frequent bettors.

Administrative Aspects

The bill was introduced by Ms. Titus and co-sponsored by Mr. Khanna on July 7, 2025, and has been referred to the Committee on Ways and Means for further consideration.

Relevant Companies

• LYV - Live Nation Entertainment: As a promoter of live events that often feature gambling, changes in gambling legislation could influence their business indirectly through increased entertainment options.
• MGM - MGM Resorts International: Changes in tax treatment of gambling losses can affect the financial behavior of their customers, potentially impacting revenues from gambling activities.
• PNK - Pinnacle Entertainment: As an operator of casinos, adjustments to tax deductions for gambling losses could influence their financial performance depending on the gambling behaviors of patrons.