Senate committee hears bill to restore deduction for wagering losses beginning 2025

Senate Bill 226, which would allow a Kansas itemized deduction for certain losses from wagering transactions beginning in tax year 2025, drew competing testimony during a hearing of the Kansas Senate Tax Committee.

Amelia (committee staff/reviser) told the committee the bill would amend "KSA 79 32 1 20 to allow losses from wagering transactions to the extent allowable pursuant to the federal internal revenue code as a Kansas itemized deduction for tax year 2025 and thereafter," and would take effect after publication in the statute book.

Supporters said the change restores a deduction Kansas had before 2012 and would make taxation of wagering more consistent with other income types. Jason Watkins, speaking for the Wichita Golden Circle, said his Park City facility — scheduled to open in December 2025 with historic horse-racing machines and simulcast wagering — and its customers would benefit. "Prior to the tax cuts back in, I think, 2012, gaming losses were deducted against your winnings," Watkins said. He described a hypothetical in which a gambler breaks even over many transactions yet would still owe income taxes on recorded winnings without a loss deduction.

Watkins said most states that have legalized wagering allow deductions for gambling losses, sometimes with limitations such as caps or income-based reductions, and told senators the fiscal note produced earlier in the process overstated the revenue loss.

Opponents argued the bill would further enable gambling and could shift costs to other taxpayers. Nick Reinicker of Inman said he opposed expanding tax benefits tied to state-authorized gambling and raised concerns about problem gambling and how wagering revenue is spent. "Don't use your legislative hammer to entice people to bet more often and in bigger amounts so they could get deductions," Reinicker said.

Committee members questioned mechanics and public policy. Senator Clem asked whether the fiscal note presented to lawmakers was from the House or a committee and noted the estimate in the record of roughly $15 million in revenue impact; staff confirmed the fiscal figures were the same across analyses. Senator Peck asked how a taxpayer would document gambling losses. Watkins replied that many facilities track play through player cards and can generate reports of wins and losses, but acknowledged that casual, untracked play would be harder to document.

No vote was taken; the committee closed the hearing on SB 226 and moved on to other bills.

Proponents and opponents provided written testimony and the committee indicated it would consider the bill in future proceedings.