Horseplayers just picked up an important win in Washington as the House Ways and Means Committee voted 38-5 on Sept. 16 to advance the Digital Asset Tax Certainty Act, H.R. 10357, which carries the gambling-focused FULL HOUSE Act to the full House. Buried in that broader digital-assets package is a simple change with outsized impact for bettors: restoring the ability to deduct 100% of wagering losses against gambling winnings, reversing the controversial 90% cap that kicked in for the 2026 tax year.
Under the current rule, losses from wagering transactions are deductible only up to 90% of a bettor's winnings, a limitation enacted in last year's GOP-led tax law and now in effect for 2026 returns. That change means a player who breaks even on the track—say $50,000 in gross winnings and $50,000 in losses—still owes federal tax on $5,000 of so-called income, because only $45,000 of the losses can be claimed. For high-churn horseplayers who routinely recycle bankroll through win bets, multi-leg exotics, and horizontal wagers, the mismatch between gross wins and net profit can be enormous, turning a neutral or losing year into a tax liability.
The FULL HOUSE Act—formally folded into H.R. 10357—would eliminate the 90% limitation and restore the longstanding rule that wagering losses are deductible up to the full amount of gains in the same tax year. Bill language reviewed by industry outlets specifies that, for taxable years beginning after Dec. 31, 2025, losses “sustained during the taxable year on wagering transactions are allowed as a deduction to the full extent of the gains during the taxable year from such transactions,” with the fix applied retroactively to Jan. 1, 2026. In practical terms, that takes horseplayers back to the familiar pre-2026 regime: what matters for tax purposes is net wins minus net losses, not the sheer volume of bets cycling through the tote.
The gambling provision is championed by Rep. Steven Horsford of Nevada and Rep. Max Miller of Ohio, a bipartisan pair who attached the FULL HOUSE Act to the larger digital-assets package after standalone efforts to undo the cap stalled. Reports from the committee markup describe limited opposition and a broad acknowledgment that the 90% cap hit professional gamblers and serious recreational bettors hardest, including horseplayers who already pay parimutuel takeout on every wager. With the Ways and Means vote now in the books, the measure heads to the full House, then the Senate, where similar gambling-tax fixes have previously struggled to gain floor time amid larger tax and budget fights.
For the everyday horseplayer, the difference between a 90% cap and full deductibility is most obvious at filing time. A pick‑5 specialist who wins $120,000 and loses $115,000 over a year currently reports $12,000 in taxable gambling income, because only $108,000 of losses are deductible; under the FULL HOUSE fix, that same season would show $5,000 in net income. For rebate players and computer-assisted wagering outfits that churn seven-figure handles to grind out modest edges, the stakes are higher still: the cap effectively taxes turnover rather than profit, eroding margins in an already razor-thin parimutuel ecosystem.
Gaming and betting industry coverage has framed the committee vote as a meaningful step toward correcting what many see as an unintended consequence of last year's tax overhaul, with outlets noting improved odds the full deduction will be restored. Articles aimed at casino patrons and sports bettors have emphasized that the fix is not a giveaway but a return to the principle that gambling losses should offset gambling gains, a view long shared by racing stakeholders who rely on horseplayer volume to fund purses and operations. For racetracks and horsemen's groups, a tax regime that doesn't penalize break-even bettors is a competitive advantage when those players decide how much of their bankroll to commit to the windows versus alternative forms of wagering and investment.
It is not yet law; the House must still pass H.R. 10357, the Senate must agree, and the president must sign, and the gambling-loss fix could still be trimmed or traded away as broader negotiations over digital-asset tax policy unfold. If the current language survives, the retroactive start date means horseplayers' activity from Jan. 1, 2026 onward would be covered, allowing full loss deductions against 2026 winnings when returns are filed in early 2027. Until then, serious horseplayers would be wise to maintain meticulous records of every ticket—wins and losses—so that if the FULL HOUSE Act crosses the wire first, they are positioned to claim every deductible dollar the law once again allows.