LAS VEGAS (KTNV) — The latest attempt to roll back a change in tax law that could affect thousands of gamblers across the country failed in the U.S. Senate on Thursday, but one Nevada lawmaker vowed to fight on.
U.S. Sen. Catherine Cortez Masto, D-Nev., tried to fast-track her bill — S.2230, dubbed the FULL HOUSE Act — which would repeal a provision in the Republican tax-and-spending bill that changed how much in losses gamblers could write off on their taxes.
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Before the so-called "Big, Beautiful Bill," gamblers could write off 100 percent of losses. But a provision in that measure changed that amount to 90 percent, creating a situation in which gamblers could end up paying taxes, even if they break even.
On Thursday, Cortez Masto asked her colleagues to allow the FULL HOUSE Act to proceed without the usual committee process. But Sen. Todd Young, R-Ind., objected.
Young said he supported Cortez Masto's bill, but wanted to add an exemption of his own, to ease an excise tax on investment income for the endowment funds of religious schools, including Notre Dame.
That, in turn, drew an objection from Sen. Ron Wyden, D-Ore., who said Republicans including Young voted for the GOP's bill that failed to include endowment fund tax relief, and were now trying to undo provisions of the bill they voted to approve.
"It's just not right to give a special home state carve out a free ride on an entirely separate proposal," Wyden said of Young's amendment.
As a result of Young's objection, Cortez Masto's bill couldn't move forward. "I'm disappointed, but I am not done," she said on the floor.
In an interview with Channel 13 afterwards, Cortez Masto described a "broken" process in which Republicans crafted the bill behind closed doors, and only unveiled it to fellow senators the night before a marathon voting session began.
She said even Republicans were surprised at the gambling tax write-off change, a feature she said she became aware of only after poker players began to raise the alarm.
"And there's no doubt in my mind, the Republicans had no idea it was even in there, some of my Republican colleagues said, because they were learning about it for the first time," Cortez Masto said. "
The provision drew objections over fairness: If a gambler wins $100,000 in a given year, but loses $100,000, he or she breaks even, and under current law, owes nothing in taxes.
But under the new provisions, a gambler in a similar position could only write off $90,000 in losses, and would owe taxes on the remaining $10,000.
Cortez Masto said the provision was not aimed at gamblers or at Nevada, but rather was an attempt by the GOP to offset the spending increases that will drive up the deficit and the national debt.
Despite the setback, Cortez Masto said she will keep looking for ways to move a repeal bill forward.
In the House — where all tax legislation must originate — Rep. Dina Titus has been gathering support for her FAIR BET Act, a straight repeal of the tax change. She's garnered support from the entire Nevada House delegation, including Republican Mark Amodei.
"I think both in the House and in the Senate, we continue to try to move this legislation, no matter how we can," Cortez Masto said. "I'm not done trying to move this legislation. I've got other procedural movements that I could make here in the Senate and I will do that to move this legislation forward. Listen, this is bipartisan legislation. [Texas Republican Sen.] Ted Cruz joined me. He's a co-sponsor on this legislation."
Added Cortez Masto: "This piece can move very quickly, because what I am hearing from my Republican colleagues is they do not oppose it, and so I'm going to hold them accountable for that, and I'm going to look for my colleagues to continue to force it, so yes, it can move by its own, or we're going to put it in a vehicle and move it as well. But I'm not giving up."
Although Nevada is most closely associated with gambling, nearly every state has some form of wagering. And the change in the Republican bill won't just affect professional gamblers, but rather anyone who itemizes taxes and writes off gambling losses, including people who play fantasy sports, gamble in sportsbooks, or play slot machines.
"This impacts everybody who engages in any type of gaming across the United States," Cortez Masto said. "And we now know gaming exists in almost every state. If you lose because you're engaging in any type of gambling or gaming that's legitimate, you're going to have to pay taxes on those losses."
Both Cortez Masto and Titus have warned that gaming activities could move offshore in a bid to avoid taxes, a move that could definitely hurt Las Vegas and Nevada.
