Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act
- Bill Number
- H.R. 6985
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-01-08: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-04-15T08:05:53Z
AI-Generated Summary
Purpose
The "Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act" aims to reinstate specific tax rules limiting deductions for losses from gambling (wagering) activities. By doing so, it seeks to ensure that such losses can only offset related gains, potentially supporting the gambling industry (like casinos) by clarifying tax treatment and preventing excessive deductions that could reduce taxable income.
Key Provisions
- Amendment to Tax Code: The bill modifies Section 165(d) of the Internal Revenue Code of 1986 (the main U.S. tax law) to state that losses from wagering transactions (e.g., bets on games, lotteries, or sports) are deductible only up to the amount of gains from those same transactions.
- Scope of Deductions: This includes any other allowable deductions under the tax code that are directly related to conducting wagering activities.
- Effective Date: The changes apply to tax years starting after December 31, 2025, meaning they would first affect 2026 tax filings.
Significant Changes to Existing Law
- The bill reinstates the pre-existing limitation on wagering loss deductions, which had been in place but is being explicitly reaffirmed or clarified through this amendment. Under current law, wagering losses are already limited to offsetting gains (preventing gamblers from deducting net losses against other income). This legislation ensures this rule remains intact, potentially countering any temporary suspensions, proposed expansions, or interpretive changes that might have allowed broader deductions.
- No major expansion of deductions is introduced; instead, it reinforces the "gains-only" offset to maintain consistency in tax treatment of gambling income.
Potential Impacts
- On Citizens: Individual gamblers or professional wagerers may face clearer limits on reducing their taxable income from winnings, potentially increasing their tax liability if losses exceed gains (as excess losses cannot offset non-gambling income). This could affect personal finances for frequent gamblers but provides certainty in tax planning.
- On Government Agencies: The Internal Revenue Service (IRS) would enforce this rule as standard, with minimal additional administrative burden since it aligns with current practices. It may slightly increase federal tax revenue by preventing over-deductions.
- On International Relations: No direct impact, as the bill focuses on domestic U.S. tax policy for wagering activities.
- Broader Economy: By supporting the "service economy" (e.g., casinos and betting industries), it could indirectly benefit states reliant on gambling revenue, such as Nevada or New Jersey, without altering business tax rules.
Main Stakeholders Affected
- Individual Taxpayers: Primarily gamblers who itemize deductions, as their ability to offset wagering losses is limited.
- Gambling Industry: Casinos, sportsbooks, and related businesses may benefit from a stable tax environment that encourages participation without fear of aggressive IRS audits on deductions.
- Federal Government: The IRS and U.S. Department of the Treasury, responsible for tax collection and enforcement.
- State Governments: Those with legalized gambling, as federal tax clarity could influence local revenue from gaming taxes.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces the tax code's treatment of gambling as a distinct activity, aligning with longstanding IRS interpretations. It avoids constitutional challenges (e.g., under equal protection or due process) by applying uniformly to all wagerers.
- Constitutional: No apparent issues, as it deals with federal taxing power under Article I, Section 8 of the U.S. Constitution, without infringing on state rights to regulate gambling.
- Political: Introduced by bipartisan sponsors (Republicans and Democrats), it reflects compromise on tax policy amid growing legalized sports betting post-2018 Supreme Court ruling. Could influence debates on gambling expansion, with potential for revenue gains appealing to fiscal conservatives, while the "service economy" framing supports industry lobbying. If passed, it signals continuity in tax rules despite evolving gambling laws.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (6)
Rep. Horsford, Steven [D-NV-4], Rep. Lee, Susie [D-NV-3], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Boyle, Brendan F. [D-PA-2]
Recent Actions
- 2026-01-08: Referred to the House Committee on Ways and Means.
- 2026-01-08: Introduced in House
- 2026-01-08: Introduced in House
Bill Versions
- Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act — issued 2026-01-08 — PDF (2 pages)