The Early Line: Congresswoman Titus Introduces FAIR BET Act To Fix Gambling Tax Change
Gambling news roundup: VGW founder has another sweepstakes gaming business; a closer look at the growing fiasco at Polymarket.
The Early Line offers a look at the top stories heading into the week, along with some analysis.
Rep. Dina Titus Introduces Bill to Restore Gaming Loss Deduction (press release): “Congresswoman Dina Titus (NV-01), co-chair of the Congressional Gaming Caucus, today introduced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act that would restore the 100% deduction for gambling losses.”
“The recently passed budget bill included a provision inserted by Senate Republicans without consent of the House that imposed a tax increase on Americans who gamble by reducing from 100 percent to 90 percent the amount of losses they can deduct from gambling winnings for their income taxes,” Congresswoman Titus said. “My FAIR BET Act would rightfully restore the full deduction for losses so gamblers don’t pay taxes on money they haven’t won.
“This common-sense legislation will bring fairness back to gaming taxation, making sure that gamblers can fully deduct losses when they report their winnings. It gives everyone –from recreational gamblers to high-stakes gamblers -- a fair shake. We should be encouraging players to properly report their winnings and wager using legal operators. The Senate change will only push people to not report their winnings and to use unregulated platforms.”
Statement from the AGA: “The American Gaming Association applauds Congresswoman Titus for introducing the FAIR BET Act. We are committed to working with Congresswoman Titus, other congressional leaders, and the Trump Administration to restore the long-standing tax treatment of gaming losses.”
Reading the line: First off, this is an elite bill name and acronym from Titus’ office.
By the time the Big Beautiful Bill passed the Senate, stopping this in real time likely became almost impossible. The House was either going to pass the bill or defeat it; amending it didn’t seem like a potential path. That left a legislative fix later on as the most likely way to stop it. There’s an argument that there should have been alarm bells sounded before it got to the House, but the cake was mostly baked as soon as the amendment got into the bill. Could everyone have mobilized earlier? Yes. Would it have made a difference? It’s possible, but it’s also doubtful it could have been edited out among all the drama and machinations around the BBB.
Titus has taken the bull by the horns and is quickly trying to create momentum for the bill. Rep Ro. Khanna (D-California), is helping with the effort. She also tweeted that Rep. Troy Nehls (R-Texas) is signing on as a co-sponsor. A truly bipartisan roster of co-sponsors (and a lot of them) could help get this to the finish line.
The change to reporting of gambling winnings and losses is clearly nonsense, and should be fixed. Passing bills in Congress isn’t easy, although this one is fairly narrow and could be a no-brainer. Of course, logic doesn’t dictate anything in Congress. Another reconciliation bill in the fall could be another opportunity to fix it.
This change is bad to catastrophic for professional gamblers, but it’s less clear how bad it would be for recreational gamblers. My guess is very few recs are itemizing their gambling winnings and losses, and those that are probably are not trying very hard to follow the rules. The bill might not impact a lot of people in practice. And with the Internal Revenue Service doing fewer audits than ever, I am skeptical this will be a point of emphasis. None of that makes the tax change good or defensible — paying taxes on money you didn’t win is extremely dumb. But I am not sure it’s the end times for the gambling industry that some people make it out to be, if Titus doesn’t push through a fix.
If you gamble or are in the gambling industry and feel strongly about the Titus bill being passed into law, the most effective thing you can do is mobilize people to contact their elected representatives to support the bill. Here is one such resource.
Pro poker player Phil Galfond has been doing some good content on all this on X/Twitter.
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults, including parents and coaches, with tools and resources to talk to young people about gambling, including information on warning signs, risks and proxy betting. The program is led by retired professional basketball player Randy Livingston and his wife, basketball agent Anita Smith, who share their personal stories related to problem gambling, with the hope of preventing others from experiencing similar harms. Learn more and join the conversation here.
Escalante sets up second casino business, annoying VGW investors (Australian Financial Review): “Laurence Escalante quietly set up an online casino in the United States that offers similar services to Virtual Gaming Worlds, the social games and sweepstakes business that has propelled the billionaire’s fortune. The private online casino is known as Kickr, and is owned by Escalante’s private family office and run by a former Virtual Gaming Worlds executive. The business began as a sports betting operator, and has expanded into casino games, aggravating investors in Virtual Gaming Worlds who say that Kickr is now competing with the other business that Escalante runs.”
Reading the line: There’s never a dull moment in the sweepstakes industry these days. VGW told AFR that Kickr “has no impact on VGW or its operations, and VGW does not view it as a competitor.” And while VGW isn’t in sports and Kickr is, they both do offer casinos. The new report also comes as Escalante has proposed a deal to take over 100% of the company.
The Debacle That Is Polymarket And Betting On Ukraine's President Wearing A Suit (Event Horizon): “At the center of a fiasco at Polymarket about Ukraine President Volodymyr Zelenskyy’s attire is a potentially existential crisis: Is the prediction market really a ‘source of truth?’ More than $145 million has been traded on the seemingly straightforward question: “Will Zelenskyy wear a suit before July?” But the market has been anything but straightforward. People who have bet both sides are convinced they’re right. And as of July 7, it still hasn’t been resolved, but it is due (maybe) to have a resolution by later today. … The problem for Polymarket is they created a silly market with lazy criteria for resolution. Both of those things are a recipe for trouble in a yes-no market with actual money on the line.”
Reading the line: It seems to be a decently big moment in the nascent prediction markets industry. Polymarket does not technically serve the US (although Americans clearly use the platform to some degree). At stake is trust in the markets themselves. Polymarket also incorrectly graded the winner of a Major League Baseball game this weekend, something that shouldn’t be hard to ensure is correct. There could be a lot riding on how Polymarket handles this… or nothing matters and Polymarket escapes the burgeoning scandal unscathed. We’ll see.
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More gambling news
FanDuel Strengthens Public Policy Expertise with New Hires (press release): “Today, FanDuel Group, the premier online gaming company in North America, announced that Shailagh Murray has been appointed Senior Vice President of
Public Affairs and Jonathan Nabavi has been appointed Vice President of Federal Affairs. Murray and Nabavi will bring their extensive experience to FanDuel as the company leads the development of a regulated gaming industry that protects customers and delivers meaningful tax revenue to states.”
“As we look to the future, we understand the important role FanDuel must play in policy discussions that will address how we build and shape the online gaming industry over the long term” said Christian Genetski, President at FanDuel. “Shailagh and Jon bring decades of experience navigating difficult policy issues in a thoughtful, collaborative manner. We are confident they are the right leaders to work alongside key stakeholders to grow our industry responsibly and sustainably.”
“Murray joins FanDuel having previously served as the Executive Vice President of Public Affairs at Columbia University. Prior to that, she spent six years shaping communications strategy inside the Obama White House, serving as Senior Advisor to President Obama from 2015 to 2017 after serving as Vice President Biden’s deputy chief of staff and communications director.
Murray’s career started in journalism with stops at the Wall Street Journal and Washington Post…”
“Nabavi joins FanDuel from the National Football League where he was responsible for all aspects of the NFL’s public policy and legislative agenda and represented the League on a wide range of issues before the U.S. Congress, the White House, other federal and local government agencies as well as with foreign governments and international institutions. As part of his role, Nabavi advised the league on its approach to sports betting crafting the league’s policy approach to the industry. Prior to joining the NFL, he served in a variety of senior congressional staff and political roles, including as Majority Counsel for the United States Senate Committee on the Judiciary, providing strategic counsel to Chairman Chuck Grassley.”
Matthew Berry’s Fantasy Live Closes $7 Million Seed Round Led By LRMR Ventures And SC Holdings; Unveils New Platform and Guillotine Leagues (press release): “Fantasy Life – the award-winning fantasy sports and gaming company spanning media and tech, founded by Matthew Berry, the legendary fantasy football personality featured on NBC Sports' Football Night in America and host of Fantasy Football Happy Hour on Peacock – today announced a $7 million seed round to support the launch of its new platform and the acquisition of Guillotine Leagues. As the official tools partner of NBC Sports, the company delivers premium content and insights to millions of fans.”
“The funding has fueled the creation of a new fantasy ecosystem featuring improved technology, expanded tools, new content offerings, and a mobile-first experience designed for scale – reinforcing Fantasy Life as a premier destination for fans and marking the beginning of a transformative new phase, driving growth and innovation in fantasy sports.”
“The round is spearheaded by LeBron James' and Maverick Carter's LRMR Ventures and SC Holdings, led by Jason Stein.“
"My entire adult life has been about helping fantasy players and sports gamers win, have more fun, and make this industry better," said Berry. "Fantasy Life is the culmination of my decades of experience — a destination for every kind of player, from beginner to sharp. With smart, personalized tools, entertaining content, and the best damn fantasy game ever in Guillotine Leagues, we're building a platform as obsessed with fantasy as we are. I'm incredibly honored that so many people I've long admired believe in what we're doing and want to be part of the journey. I can't wait for everyone to check out the new features and win more titles."
Bob Costas Fears the Ease of Sports Gambling Will Lead to Addiction: ‘It’s Going to Ruin Some Lives, That’s Inevitable’: “Bob Costas issued a warning against legalized sports betting while speaking to ’Meet the Press’ host Kristen Welker on Sunday, emphasizing its impact on families. ‘In the big picture, the house always wins,’ he said, ‘[and] now you’ve got young guys with a phone in their hand, it’s right there. And some of those people are going to become addicted to it and it’s going to ruin some lives, that’s inevitable.’”
Tipico Fined $25K in New Jersey Despite No Longer Operating in U.S. (Sports Betting Dime): “Tipico has not been operational in the U.S. since last year and it is still taking losses. The New Jersey Division of Gaming Enforcement recently fined Tipico $25,000 for violation of self-exclusion rules and for allowing a patron to cash out wagers at overly inflated odds. Tipico sold its U.S. operations to MGM Resorts International on June 24, 2024.”
The Suspect Pitches In MLB’s Gambling Investigation Of Luis Ortiz Look Not Great (Defector): “The eye test does not look great, but also isn't necessarily damning on its own. The first pitch to Arozarena is within tolerance; the pitch against Pagés is one of the most egregious balls you'll ever see. Of course, the pitches have to be put in the context of Ortiz's normal spread. Sometimes pitchers are just bad. Luckily for us and perhaps unluckily for Ortiz, MLB is in the position of having a plethora of data to help pinpoint outliers. On a basic level, here is the location of every slider Ortiz has thrown for a ball in 2025:”
Delusional golf gambler sends Max Homa $1,900 Venmo request after final round at John Deere Classic (Golf Digest): “Max Homa played his best golf in well over a year at this weekend’s John Deere Classic. He started the week with a scintillating eight-under 63 on Thursday and grabbed the solo lead briefly on Sunday before fading, finishing two strokes out of the playoff between Emiliano Grillo and eventual winner Brian Campbell. The performance was still a massive step in the right direction for Homa, whose T5 at TPC Deere Run was his first top 10 in over 14 months, but that wasn’t enough for some deranged golf bettors, who took to the Internet to harass Homa and even send him a $1,900 (!) Venmo request to cover their losses.”
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