It's not quite as cut and dry as you may think.
Many people wonder how gambling activities are treated for tax purposes.
Taxpayers often run into tax difficulties in this area. This is because gambling winnings are fully taxable, while gambling losses aren't simply offset against the winnings. To measure your winnings on a particular wager, just use the net gain on the wager. You must separately keep track of losses. A second important limitation is that your gambling losses are only deductible up to the amount of your gambling winnings.