  A recent experiment has provided the first evidence for itinerant
ferromagnetism in an ultracold atomic gas of fermions with repulsive
interactions. However, the gas in this regime is also subject to significant
three-body loss. We adopt an extended Hertz-Millis theory to account for the
effect of loss on the transition and on the ferromagnetic state. We find that
the losses damp quantum fluctuations and thereby significantly increase the
critical interaction strength needed to induce ferromagnetism. This effect may
resolve a discrepancy between the experiment and previous theoretical
predictions of the critical interaction strength. We further illuminate the
impact of loss by studying the collective spin excitations in the ferromagnet.
Even in the fully polarized state, where loss is completely suppressed, spin
waves acquire a decay rate proportional to the three-body loss coefficient.
