When it comes to President Donald Trump’s “big, beautiful bill,” few places stand to be more deeply affected than Nevada, one of the most politically divided swing states in the country.
The bill makes sweeping changes to Medicaid and food assistance programs, potentially pushing hundreds of thousands of Nevadans off these critical safety nets. State officials anticipate major disruptions, as they struggle to cover the gap without the financial flexibility enjoyed by other states.
Unlike many of its counterparts, Nevada has no state income tax and is severely limited in how it can generate new revenue. That means lawmakers will have few options to protect residents from losing benefits. The law’s impact on the state budget—and the broader economy—could therefore be especially harsh.
The legislation also contains tax changes directly targeting Nevada’s core industries: hospitality and gaming. Provisions involving taxes on tipped income and gambling losses are expected to hit service workers and professional bettors hard—two groups that make up a significant portion of the state’s workforce and revenue base.
These changes are coming just as Nevada prepares to play a major role in upcoming elections. The state will be a battleground in the 2026 midterms and again in 2028, when voters will weigh in on presidential and Senate races that could shape national politics.
In 2026, Governor Joe Lombardo—who has tried to navigate a middle ground by supporting parts of the bill while criticizing others—faces a challenging re-election in what’s expected to be one of the tightest governor’s races in the country. At the same time, Nevada’s 3rd Congressional District, held by Democrat Susie Lee, is one of the most closely watched House races in the fight for control of Congress.
Democrats are already seizing on the law’s provisions as a political weapon. State Assembly Speaker Steve Yeager says he’s heard from many concerned Nevadans who fear the changes to Medicaid, food aid, energy credits, and taxes on tips and gambling will leave them worse off. He’s vowed to make sure voters understand what’s at stake by the time they head to the polls.
About a third of all Nevadans rely on Medicaid, due in part to a major expansion of the program in 2013 under then-Governor Brian Sandoval. Trump’s new law reverses key parts of that expansion, introducing stricter work requirements, ending federal reimbursements to states, and limiting the fees states can use to fund their Medicaid programs. In Nevada, up to 100,000 people could lose coverage, according to a leading nonpartisan research group.
With limited tools to generate more money—no income tax and a two-thirds legislative requirement to raise revenue—state officials say they may be unable to soften the blow. “We don’t have the funds to be able to fill these critical gaps,” Yeager said. “We’re a low-revenue state … we’re in a really tough place.”
The gambling industry is also expected to take a hit. Under the new law, gamblers will only be able to deduct 90% of their losses from their taxes. Currently, they can deduct the full amount up to their winnings. That change could have an outsized effect in Nevada, where casinos and professional betting are major economic drivers.
Senator Jacky Rosen criticized the move, pointing out that someone who wins and then loses a large jackpot would still be taxed on “income” they never actually kept. “That’s not just bad math, it’s bad policy,” she said.
Another controversial feature of the bill is the so-called “no tax on tips” policy. Trump introduced it at a 2024 campaign rally in Las Vegas, promising service workers that all their tips would be tax-free. The law allows up to $25,000 in tipped income to be deducted from federal taxes.
However, economists note that more than a third of tipped workers earn too little to benefit from the deduction at all, since they don’t owe federal income taxes. The provision also phases out for those earning over $150,000 annually and expires in 2028, making its long-term impact uncertain.
Democrats have also slammed the bill for effectively freezing funds from the Inflation Reduction Act. Nevada had been among the biggest recipients of clean energy incentives, using the funds to expand solar jobs and reduce energy costs. Now, with those dollars drying up, power bills are expected to rise again—especially as summer temperatures soar.
All of these impacts could reshape the 2026 race for governor. Lombardo won narrowly in 2022 and is now considered one of the most vulnerable Republican governors on the ballot. Democrats are already trying to tie him to the bill, accusing him of failing to stand up to Trump.
“Lombardo will have to reckon with the damage done to Nevadans’ lives and livelihoods because he was too cowardly to stand up to Trump,” said Nevada Democratic Party Chair Daniele Monroe-Moreno.
While Lombardo has praised the tax cuts and investments in business included in the bill, he also publicly urged Congress not to touch Medicaid funding. On the day before Trump signed the bill, he posted that Nevadans should be excited about lower taxes, support for small businesses, and border security.
His office declined to comment further, instead referring reporters to those earlier statements and letters Lombardo had sent to lawmakers expressing concern about Medicaid and the gambling loss deduction.
Notably, Lombardo was one of just seven Republican governors who didn’t sign a public letter supporting the bill back in May—a sign of the political tightrope he’s walking.
The broader dynamic reflects a challenge facing many Republicans. They’re eager to promote the bill’s popular tax provisions while distancing themselves from the deeper cuts that Democrats are already spotlighting.
A pro-Lombardo PAC defended his record, pointing to progress on affordable housing and education. “Under Governor Lombardo’s leadership, Nevada is finally getting back on track,” said spokesperson John Burke, adding that Lombardo supports both the tip deduction and restoring full gambling loss write-offs.
Democratic Attorney General Aaron Ford, who has entered the race to unseat Lombardo, sharply criticized the bill’s cuts to healthcare and food aid. He also challenged the claim that the tip tax provision will help most workers, saying: “Servers, bartenders, and hospitality workers are going to be getting played.”
