Congress Has Weeks to Restore the 100% Gambling Loss Deduction. What Traders Should Plan For

For 2026, only 90% of gambling losses are deductible, and nothing has changed that yet. A fix that restores the full deduction cleared the House Ways and Means Committee 38 to 5 in September. It still needs a vote in the full House and the Senate before Congress leaves in December. If it passes as the committee wrote it, it reaches back to January 1, 2026.

What did Congress do this month?

On November 5, Rep. Dina Titus of Nevada wrote to House Speaker Mike Johnson and Majority Leader Steve Scalise. She asked them to “expeditiously bring a gambling loss deduction fix to the House floor” and to “include it in a must-pass legislative vehicle.” Her own bill is the FAIR BET Act, H.R. 4304, introduced in July 2025.

The fix already has a committee vote behind it. On September 16, Ways and Means approved H.R. 10357, the Digital Asset Tax Certainty Act, 38 to 5. Accounting Today reported that the package carries the FULL HOUSE Act from Reps. Max Miller and Steven Horsford, which “restores the full deduction for gambling losses, up to the amount of their winnings,” in Chairman Jason Smith’s words.

Steve Ruddock’s Straight to the Point newsletter put a clock on it on November 10. The House is scheduled to adjourn on December 17 and the Senate on December 18. Ruddock has called the effort a long shot before, because the lawmakers who added the 90% rule are still in Congress. Schedules slip, and nothing here is a forecast of a vote.

Whose taxes does it change?

Only people whose trades are taxed as gambling. The 90% rule lives in Section 165(d) of the tax code, which covers wagering losses. The IRS hasn’t said whether Kalshi and Polymarket trades are wagers, so the rule reaches your trades only if you or your preparer file them as gambling.

• Gambling: the fix matters. Your deductible losses go from 90% back to 100%, still capped at your winnings.
• Capital gains, ordinary income, Section 1256: no change. None of them uses Section 165(d).
• Sportsbook and casino bets: the fix applies to them, and they pool with any prediction market trades you file as gambling.

One more limit stays either way: gambling losses only count if you itemize. If you take the standard deduction, neither version lets you deduct them. How the 90% rule and the winnings cap stack.

How much is the fix worth in dollars?

Take a trader with $50,000 of winnings who itemizes. The fix only changes the result when 90% of the losses is less than the winnings. Past that point the cap at winnings does the work under both versions.

The break-even year is the one that stings. You made nothing, and the 90% rule taxes you on $5,000. At a 24% bracket that is $1,200 of federal tax on a year with no profit. The fix would bring it to zero. A heavy trader’s winnings and losses are often many times their net result, so the gap grows with volume.

What should you do before December 31?

• Plan on the 90% rule. It is the law today. If the fix passes, your gambling number gets better, not worse.
• Keep complete loss records. Under either version, losses only count if you can show them. Download your full trade history from each app.
• Know your number under each method. If gambling is your most expensive method by a wide margin, the fix may not change which method you and your preparer pick.
• If a fix passes after you file, an amended return is the usual way to claim a change that reaches back. Ask your preparer when the time comes.

How does WagerMints handle it?

WagerMints shows your year under all four federal methods side by side, with the gambling method under the 90% rule that is law for 2026. If Congress restores the full deduction, we’ll change the gambling method to match and date the change on this page. The other three methods don’t move. For how the methods compare in general, see the prediction market tax guide.

Questions about the gambling loss deduction

General information about US tax, not tax or legal advice.