Deputy Editor
U.S. Rep. Dina Titus‘ attempt to get an onerous gambling tax change repealed has run into an immediate roadblock. The House Rules Committee blocked Titus’ attempt to include the language of her Fair Accounting for Income Realized From Betting Earnings Taxation Act (FAIR BET Act) as an amendment to the National Defense Authorization Act (NDAA).
The NDAA is considered “must-pass.” Attaching the FAIR BET Act to other budgetary legislation has always been the most likely way to get a repeal through, gambling tax professional Russ Fox told PokerScout last year. The NDAA was the first such opportunity in 2026, though it won’t be the last. Still, this early failure indicates that the Rules Committee will be one of several hurdles the pro-repeal camp has to navigate.
Hopes were high for a quick repeal after Rep. Tom Cole of Oklahoma, a high-ranking Republican who chairs the Appropriations Committee, decided to cosponsor the bill.
Meanwhile, Fox and other tax experts are divided on mitigation strategies for gamblers affected by the bill. Some prominent certified public accountants (CPAs) in the industry have proposed filing strategies that help reduce taxable income. Fox and other stakeholders have suggested these may be off-base.
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Early Roadblock Not a Death Sentence for FAIR BET Act
The House Rules Committee acts as a filter on bills, deciding which ones go to the floor for debate. It is currently controlled by Republicans, and Titus is a Democrat. The House Rules Committee reportedly noted concerns about a negative impact on tax revenue as the reasoning for declining to debate the FAIR BET Act.
As is, gamblers filing their 2026 taxes next year would be subject to a cap of deducting 90% of their losses. That could result in paying taxes on money they never actually win.
The FAIR BET Act does have bipartisan support now, thanks to Cole’s involvement. Having a prominent Republican advocating for repeal makes the chances much better this year.
The bill remains active and in the Ways and Means Committee, which deals with revenue-raising legislation. The Appropriations Committee, which Cole chairs, is its counterpart that deals with revenue-spending measures.
The bill’s co-sponsors appear to have considerable work ahead, first convincing the Rules Committee of its worthiness before it can go for wider debate in both chambers. The bill may face even tougher challenges in the Senate, as that’s where the controversial changes originated.
Betting markets speculating on the bill’s chances haven’t reacted much to the early block. Kalshi odds have not moved since PokerScout last checked, still pegging chances of a 2026 repeal at 44%.
Tax Experts Divided on Filing Strategies for Gamblers Affected by Change
The good news for gamblers is that the change won’t take effect until they’ve filing taxes in 2027 for the current tax year. If a repeal does pass this year, the changes will be reverted before they’ve actually cost anyone any money. That said, the clock is already ticking, and the first avenue of attack has already been closed off.
In the meantime, gamblers have to start thinking about their record-keeping and filing strategies in case a repeal doesn’t pass. And tax experts don’t agree on what gamblers can do to mitigate damage from the change.
Gary Kondler of Kondler & Associates CPAs sparked a discussion on the matter with a podcast appearance. On Gambling With an Edge, he cited a couple of court cases that he believes could help gamblers reduce their taxable income: Shollenberger v. Commissioner and Boneparte v. Commissioner. Chiefly, Kondler said, using a “per-establishment” session for the entire year could let gamblers use the net winnings rather than gross winnings to lower their number.
“We can bring in these court cases to track our wins and losses at a much lower netting level rather than a gross receipt level,” Kondler explained.
Kondler said he spoke extensively with Bryan T. Camp, a Texas Tech law professor with a similar opinion on “per-establishment” filing strategy. Camp published an article explaining his reasoning last August, shortly after the tax change passed. It’s a rather dense and lengthy read. But Camp says from the jump that “changes may help taxpayers as much as hurt them.”
Disagreement With Kondler’s Interpretation
Fox, however, penned a blog post explaining that he disagrees. He said that such interpretations of a “session” fail the “smell test.”
“Session-based accounting, and keeping good records thereof, is the only way to minimize the damage of the new 90% loss limitation,” he wrote. “Using year-long establishment-based results will not work.”
Fox writes that, absent formal definitions, common usage tends to guide legal decisions. It’s hard to argue that “session” is commonly used to describe all play at a single venue in a given year.
Jerod Smith, a tournament player with a background in law, wrote on X that he sees the situation the same way.
“Upon reading the opinions in Bonaparte and Bright, I see absolutely no ruling to indicate that a ‘per-establishment’ approach is or will be allowed,” he said.
Even if Kondler is correct, he noted that the interpretations weren’t likely to help high-level tournament poker players with hundreds of thousands of dollars in buy-ins who travel to many venues each year.
“For the 1% of the 1%, no, I don’t have anything for them yet,” he said.
One thing Kondler and Fox agreed on was that no official ruling is likely to emerge on this for several years. Given the vague wording of the law, federal courts will likely be called in to provide an official interpretation. Both men said it would likely take until 2030 for the judicial system to render a final verdict on the subject.
That leaves poker players in a bit of tax limbo until then.
“No one will definitely know an answer on this for years,” Fox wrote.
Image credit: Keith Allison/Wikimedia Commons (license)
