OPINION: Nevada tries to remove the joker from the deck with FAIR BET bill
“Politics and poker
Politics and poker
Shuffle up the cards
And find the joker …”
You’d think a person who takes such pride in not paying taxes wouldn’t have blown this one, and yet here we are.
On the way to fudging the math necessary to defend the border against marauding produce pickers and securing a multitrillion-dollar tax break for the wealthiest Americans, the congressional acolytes heralding President Donald Trump’s One Big Beautiful Bill Act managed to botch the commonsense tax deduction for personal gambling losses.
The fall guy on this one is Sen. Mike Crapo (R-ID). He represents a state whose Constitution calls gambling “contrary to public policy and … strictly prohibited,” but allows for exceptions for the state lottery and charitable bingo hustles.
Given Crapo’s lack of expertise in this area, what could possibly go wrong?
From his lofty perch on the Senate Finance Committee, he surmised that the provision enabling gamblers to subtract their losses from their winnings in equal measure before paying taxes on the net profit needed tweaking. It was changed so that only 90 percent of gambling losses could be deducted from gains.
Casino suckers and losers, and they are legion, probably wouldn’t notice the adjustment. They don’t end up on the plus side of the ledger. But advantage players, professionals who gamble large sums over the course of a year but generally net a small-percentage profit, are sure to take a hit.
Personally, I trust them more than members of the Senate. The sharps do math for a living.
As one pro explained to frontofficesports.com, “If I win $100 million and lose $99 million, that would be a great year, to have $1 million in profit! But with this bill, I would have to pay taxes on about $10 million in ‘gains,’ which would turn my year into a $2 million loss.”
The reaction to Crapo’s gambling tax provision has been swift. Trump’s signature had barely dried on his behemoth bill when Rep. Dina Titus (D-NV) pounced on it, calling out the gaming tax change. She quickly introduced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act, which aims to restore the 100 percent reduction on gambling losses. The bill has already been referred to the House Ways and Means Committee, which presumably will take time to read it.
The Silver State’s congressional bandwagon quickly filled to overflowing with strong protests from both houses. That includes Rep. Mark Amodei (R-NV), who voted for the end product.
In decades past, finding co-sponsors for a gambling-related bill, even one as flawed and simpleminded as this one, would have been a difficult proposition. Nevada was the only state in the nation with legalized gambling. The activity made us an easily vilified pariah despite the fact illegal gambling existed in every corner of the continent.
Public opinion shifted after regulated gambling was approved for Atlantic City in June 1977. State-sponsored lotteries made the numbers racket legal, and by 1988 the Indian Gaming Regulatory Act started a new era of casinos on sovereign tribal lands.
But it wasn’t until the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 that sports betting, the last of the gaming industry outcasts, that the gradual acceptance of gambling turned into a groundswell.
Idaho is one of the few places in the nation where gambling remains the vice it had always. It's the home of the joker in our tale of marginal morality.
In his defense, Crapo might be the most informed member of the finance committee on this prickly provision. At least he’s read it.
In a routine worthy of those two old Muppets who rant from the theater balcony, Crapo appears positively informed compared to 91-year-old Sen. Chuck Grassley (R-IA) and his vaudeville partner Sen. John Cornyn (R-TX).
In response to a reporter’s question about the gaming tax provision, Grassley said, “If you’re asking me how it got in there, no I don’t know.”
Cornyn added with remarkable comic timing, “I’m not sure what it does.”
Move over Statler and Waldorf. You’ve been replaced.
The FAIR BET Act aligns with Titus’ pugnacious support for the gaming industry from her front-row district that includes the Strip. And, to be sure, I can’t recall a time that defending the casinos hurt an elected official’s incumbency.
In the Senate, Catherine Cortez Masto (D-NV) introduced a companion bill, a mouthful called the Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act on Thursday. It picked up immediate pushback from Sen. Todd Young (R-IN). Cortez Masto pronounced herself disappointed, “but I am not done.”
With as many as 12 million Americans expected to lose Medicaid coverage and red and blue states alike bracing for the impact, there are plenty of things about the Big Beautiful Behemoth to question. The gaming tax deduction snafu should be kept in perspective.
The farther you drive from Nevada, the less you’re likely to hear about this issue. But it’s important to remember that it has a growing amount of bipartisan support. With so many states embracing legalized gambling and sports betting to the point of intoxication, why wouldn’t it?
Unlike neighboring Idaho, gambling is not contrary to public policy in Nevada. It is public policy.
And for better or worse, the last I checked America was a nation of gamblers.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots go back to 1881. His stories have appeared in New Lines, Time, Readers Digest, Rolling Stone, The Daily Beast, Reuters and Desert Companion, among others.