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The effort to reverse one of the tax hikes in President Donald Trump’s “One Big, Beautiful Bill” came up short in the Senate on Thursday (July 10) due to opposition from a lone senator who sought to add an exemption of religious colleges from the federal endowment tax.
Senator Catherine Cortez Masto, a Democrat from Nevada, introduced S-2230 to remove the provision stating that gamblers can only deduct 90 percent of their losses. Players are currently allowed to subtract 100 percent of losses from their gains before paying taxes.
On Monday (July 7), Democratic Representative Dina Titus, whose congressional district includes the Las Vegas Strip, introduced legislation in the House to repeal the controversial provision.
The gambling tax code change goes into effect in 2026 and will not affect gamblers' tax returns for the 2025 tax year. The change is expected to bring in about $1.1bn more in revenue compared to continuing the current policy, according to Joint Committee on Taxation estimates.
“The gaming industry is a massive contributor to our state’s GDP,” Masto said. “Unfortunately, tucked into the Republicans’ tax bill was a provision that puts the industry at risk, (and) not just in Nevada but across the country.”
Overall, Nevada’s gaming industry experienced a record-setting year in 2024, with total gross gaming revenue (GGR) reaching $15.6bn. According to the American Gaming Association, commercial gaming revenue reached $66.6bn in 2023, while tribal casinos posted revenue of $41.9bn in 2023.
Masto reminded her colleagues that until Trump signed the bill on July 4, the law of the land was that gamblers could deduct 100 percent of their losses from their annual taxes.
That means if a gambler won $500,000 during a trip to Las Vegas but lost $500,000 over the year, the net amount of tax would be zero under the current tax code. But at 90 percent, Masto said a gambler would have $50,000 in taxable income. even though they lost everything they won that year.
“They’d literally be paying taxes on money they don’t have,” Masto said. “This makes no sense, and it will do irreparable harm to our country’s gaming industry if it takes effect, especially in Nevada. It will disincentivize professional gamblers, like players at the World Series of Poker, from doing what they do best and contributing to our economy.”
Masto criticized the Republican tax bill, saying it is full of provisions that are bad for Nevada and this country.
“That is why I didn’t vote for it,” the senator said. “And while it will take years to undo the damage that bill will cause, this ridiculous gaming tax is something we can fix today.”
Masto then asked for unanimous consent on S-2230, and that the bill be considered a third time and passed. Under unanimous consent, any one senator can object to a bill’s passage.
Republican Senator Todd Young, of Indiana, initially reserved his right to oppose the bill, reminding his colleagues that unfortunately there are a number of provisions that had to be written in a very specific way to comply with the Byrd rule in the Senate.
“The underlying bill is an effort to fix one of those instances, and I’m supportive of the policy change,” Young said. “Another provision that was unfortunately not included in the final bill as a result of the Byrd rule, was an exemption for qualified religious institutions from the excise tax on investment income of certain private colleges and universities, also known as the .”&Բ;
The rule is named after the late Democratic Senator Robert Byrd of West Virginia and is a key part of the reconciliation process, ensuring that reconciliation is used for its purpose to address budgetary issues, and not related policy changes.
Young said he strongly supported Masto’s bill, but he would have to object unless she agreed to his request to include the amendment. Senator Ron Wyden, a Democrat from Oregon, was quick to oppose Young’s amendment calling it a “special carve out.”
“If my Republican colleague wants to exempt (his) home state colleges and universities from the endowment tax, they shouldn’t have passed this deeply flawed bill in the first place,” Wyden said.
Young told Wyden that it’s understandable that his colleagues would want to “characterize this eminently reasonable request as something that is parochial in nature.”&Բ;
Young then praised the “One Big, Beautiful Bill” for its tax cuts, increased funding for the military and board security before objecting to Masto’s proposal.
Masto said it is a shame that the Senate cannot pass “this common sense fix,” even though many Republicans, along with Democrats, didn’t even know it was part of the process.
“It’s not unique to Nevada,” Masto said. “This is gaming. Gaming exists across the country. Almost in every state. There are so many people that are gonna be impacted by this, and it just doesn’t make sense. This is a Republican piece of legislation that is actually causing people to pay taxes on money they lost.”
Masto’s fellow Democratic Senator from Nevada, Jacky Rosen, and Republican Senator Ted Cruz of Texas have signed on as co-sponsors of . The bill has been assigned to the Senate Committee on Finance.
Rosen said taxing losses doesn’t make sense, saying “it’s not just bad math, it’s bad policy.”
Both bills would effectively do the same thing and restore the 100 percent deduction for gamblers. Titus reminded her “friends in the Senate” that revenue bills must originate in the House.
“Any bill or unanimous consent action in the Senate would be just for show,” Titus posted on X on Tuesday (July 8).
