Fair Accounting for Income Realized from Betting Earnings Taxation Act

Bill Number

H.R. 4304

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2026-02-12: Motion to Discharge Committee filed by Ms. Titus. Petition No: 119-16. (<a href="https://clerk.house.gov/DischargePetition/2026021216">Discharge petition</a> text with signatures.)

Last Updated

2026-03-28T08:06:15Z

AI-Generated Summary

Purpose

The FAIR Bet Act (H.R. 4304) aims to update tax rules for gambling by allowing taxpayers to fully deduct losses from betting activities against their betting winnings, promoting fairer accounting of gambling income for federal income tax purposes.

Key Provisions

• Amends Section 165(d) of the Internal Revenue Code of 1986, which currently limits deductions for wagering losses.
• Changes the deduction limit from 90% of wagering gains to 100% of wagering gains, meaning losses can now offset winnings dollar-for-dollar up to the amount of the gains.

Significant Changes to Existing Law

• Under current law, taxpayers can deduct wagering losses only up to 90% of their wagering gains, leaving 10% of net gains taxable even if losses nearly equal winnings.
• This bill eliminates the 90% cap, allowing full (100%) deduction of losses against gains, which simplifies tax reporting for gamblers and aligns deductions more closely with actual net income from betting.

Potential Impacts

• On citizens: Gamblers and bettors (e.g., those using sportsbooks, casinos, or lotteries) may see reduced taxable income from gambling, potentially lowering their overall tax bills and encouraging more participation in legal betting activities.
• On government agencies: The Internal Revenue Service (IRS) could collect less revenue from gambling taxes due to fuller loss deductions, possibly affecting federal budget projections; no direct impact on international relations.
• Broader effects might include increased transparency in gambling tax filings, as taxpayers report net results more accurately.

Main Stakeholders Affected

• Taxpayers who gamble: Primary beneficiaries, as they can deduct losses more fully, reducing tax liability on net gambling income.
• Gambling industry (e.g., casinos, online sportsbooks): Indirectly benefits from potentially higher customer participation due to tax incentives.
• U.S. Treasury and IRS: Faces potential revenue loss from adjusted tax deductions, requiring updates to tax forms and guidance.
• Congress and policymakers: Involved in overseeing tax code changes related to emerging gambling markets, like legalized sports betting.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens taxpayer protections under the Internal Revenue Code by removing an arbitrary deduction limit, potentially reducing disputes over gambling tax calculations; no challenges to constitutional principles like equal protection or due process are evident.
• Political: Reflects growing acceptance of gambling in the U.S. (e.g., post-2018 Supreme Court ruling on sports betting), signaling a shift toward treating betting as legitimate economic activity; could spark debates on fiscal responsibility, as it may reduce government revenue without offsetting measures.
• No major constitutional issues, but it invites future expansions of tax deductions in other areas, influencing broader tax policy discussions.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Titus, Dina [D-NV-1]

Cosponsors (25)

Rep. Khanna, Ro [D-CA-17], Rep. Nehls, Troy E. [R-TX-22], Rep. Horsford, Steven [D-NV-4], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Amodei, Mark E. [R-NV-2], Rep. Lee, Susie [D-NV-3], Rep. Cisneros, Gilbert Ray [D-CA-31], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Soto, Darren [D-FL-9], Rep. Reschenthaler, Guy [R-PA-14], Rep. Salinas, Andrea [D-OR-6], Rep. Stanton, Greg [D-AZ-4], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Gottheimer, Josh [D-NJ-5], Rep. Stevens, Haley M. [D-MI-11], Rep. Miller, Max L. [R-OH-7], Rep. Gray, Adam [D-CA-13], Rep. Valadao, David G. [R-CA-22], Rep. McGarvey, Morgan [D-KY-3], Rep. LaLota, Nick [R-NY-1], Rep. Ezell, Mike [R-MS-4], Rep. Barr, Andy [R-KY-6], Rep. Cole, Tom [R-OK-4], Rep. Bergman, Jack [R-MI-1], Rep. Ruiz, Raul [D-CA-25]

Recent Actions

• 2026-02-12: Motion to Discharge Committee filed by Ms. Titus. Petition No: 119-16. (<a href="https://clerk.house.gov/DischargePetition/2026021216">Discharge petition</a> text with signatures.)
• 2025-07-07: Referred to the House Committee on Ways and Means.
• 2025-07-07: Introduced in House
• 2025-07-07: Introduced in House

Bill Versions

• Fair Accounting for Income Realized from Betting Earnings Taxation Act — issued 2025-07-07 — PDF (2 pages)