The National Thoroughbred Racing Association (NTRA) reported progress in efforts to restore the full tax deduction on gambling losses for taxpayers. Currently, taxpayers can deduct 100% of their gambling losses against winnings, but under President Trump’s tax legislation, this deduction would be reduced to 90% starting in 2026. This reduction has faced opposition from the horse racing industry and other regulated gambling sectors, as it could result in gamblers paying taxes on “phantom income”—income they did not actually earn.

In response, bipartisan bills such as the FAIR BET Act and the WAGER Act have been introduced to reinstate the 100% deduction, with the WAGER Act seen as the more likely to pass due to Republican support. Key congressional leaders, including the House Ways and Means Committee chairman and the Senate Finance Committee chairman, have expressed support for restoring the deduction. The NTRA is actively campaigning for the WAGER Act, including running ads during major racing events, signaling strong advocacy for the legislation’s passage.