Industry leaders in horse racing are optimistic that a recent tax provision limiting gamblers to only a 90% deduction of losses against gambling winnings—introduced in the “Big Beautiful Bill”—will be reversed before taking effect in 2026. Shawn Smeallie, an industry lobbyist, highlighted that this change could unfairly tax bettors who actually lose money overall, as they would still owe taxes on a portion of their supposed winnings. Legislation has already been introduced in Congress to restore the full 100% deductibility, with expectations that a tax bill this fall will include this fix, supported by powerful gaming groups like the American Gaming Association and bipartisan senators.

Beyond this issue, the industry successfully advocated for the permanent inclusion of 100% bonus depreciation in the final bill, benefiting farms, owners, and breeders by allowing tax planning on qualifying property and horse purchases. Smeallie urged industry stakeholders to maintain active communication with lawmakers, emphasizing the importance of grassroots support and personal relationships in Washington to address ongoing and future challenges, such as visa policies and regulatory efforts affecting horse racing.