While 2026 US state legislative sessions ramp up, an effort to restore the federal gambling tax deduction cap to 100% stalled again.
The US House Rules Committee did not advance an amendment for the Consolidated Appropriations Act, HR 7148, last week, which would restore the gambling loss deduction cap to 100%. There were approximately 70 amendments that lawmakers did not add to the bill. Last year, President Donald Trump’s One Big Beautiful Bill reduced the cap to 90%.
Rep Dina Titus, who has led the push to restore the deduction to 100% since the OBBB passed, led the effort. Titus told the committee there were 25 legislators co-sponsoring the amendment.
“It’s a fairness issue,” Titus said. “You shouldn’t tax people on money that they don’t earn. It’s ghost money, it’s not fair and we can fix it. I urge you all to please make this amendment in order and let’s go back to the way things were and should be.”
In September 2025, the Rules Committee blocked Titus’s first proposal, the Fair Accounting for Income Realized Betting Earnings Taxation Act, or FAIR BET Act.
Virginia gambling commission bill moves forward
Virginia lawmakers discussed several gambling-related bills last week, including one that will advance the state toward online casino talks.
A Senate subcommittee did not advance a bill, SB 118, that would legalise online casinos in Virginia. However, that was not a surprise, as multiple legislators have said any gambling expansion is unlikely until they set up a consolidated gambling regulator.
Senator Mamie Locke sponsored the iCasino bill. She also introduced a similar bill last year, but pulled it before any discussion for further study.
The subcommittee combined a pair of bills that do just that, as SB 195 and SB 558 would create the Virginia Gaming Commission. The state’s various gambling verticals are currently overseen by three separate regulators.
House counterparts are awaiting subcommittee action. In the House, the General Laws Committee passed HB 515, which bans funding sports betting accounts with credit cards.
Missouri regulators stay with prop bets
The Missouri Gaming Commission discussed banning college player prop bets last week.
The discussion followed a renewed call from the NCAA for the sports betting industry to ban collegiate prop bets. This month, a federal indictment for alleged bribery, wire fraud and conspiracy included players from 17 NCAA Division I teams.
Online Missouri sportsbooks launched in December. The recent debut and lack of information kept the MGC from acting.
“I just don’t feel that I have enough information to grant a request by the NCAA to prohibit this type of sports wagering because I don’t know enough yet,” MGC Chair Jan Zimmerman said, per the Associated Press.
Tennessee lawmakers introduce sweeps ban
Tennessee Rep Scott Cepicky introduced a bill, HB 1885, that would ban online sweepstakes casinos. Cepicky’s bill is just the latest in a wave of action against the industry since last year.
The bill defines sweepstakes games as those that allow players to use virtual coins “directly purchased, received through a bonus or promotion, or received for free with the purchase of another type of currency or related product, service, or activity” in games that resemble casino-style gambling, bingo and sports betting.
An Indiana House committee sent forward a sweepstakes ban last week. Lawmakers in Florida, Maine, Maryland and Virginia also introduced sweepstakes ban proposals.
Last year, six states banned sweepstakes casinos, including New Jersey, New York and California. Regulators in states across the country also sent hundreds of cease-and-desist letters to sweepstakes operators.
Two Tennessee lawmakers also introduced bills, SB 1831 and HB 1768, to prohibit online sports betting on college campuses.
New York lawmaker proposes limiting bet types
While Senator Joe Addabbo renewed his push to legalise online casino in New York, other lawmakers are looking to tighten the gambling industry.
Assemblywoman Carrie Woerner introduced A 9636, which would eliminate prop bets and over/under bets.
Woerner’s bill would limit sports betting to “final outcome, score or winner of a sporting event or contest.”
Assemblyman Alex Bores introduced two bills related to gambling. A 4280 would require sports betting operators to add “default betting limits” to all accounts. A 9125 would prevent operators from limiting bettors because of wagering activity. It would still allow for limiting bets on suspicious activity or potential problem gambling.
Online gambling bills done in Indiana?
Rep Ethan Manning, a strong iCasino proponent in Indiana, saw his iLottery bill pulled from the House agenda last week.
Manning told the Indiana Capital Chronicle that might be it for online gambling expansion this year.
“It didn’t have enough support, really, from either caucus on the concept,” Manning told the publication. “I don’t think I could have changed one word in the bill to gain any more votes. It’s just the idea itself. We’re clearly not ready, as a Legislature, to move any further on any forms of online gambling.”
Manning’s HB 1052, which bans sweepstakes casinos, is still alive. Before passing out of committee, lawmakers declined to add an amendment to legalise online casinos.
Iowa looks to regulate prediction markets
As prediction market operators spar with state regulators in courts across the country, Iowa lawmakers could bring them under the purview of the Iowa Department of Revenue.
Senator Mike Klimish introduced SF 2085 last week to regulate prediction market operators. It would require the operators to secure a $10 million permit from the state.
State regulators locked in legal battles with the platforms argue they offer illegal sports betting. Addabbo, the senator from New York, told iGB last week he also believes prediction markets should be regulated.