It's not just a matter of netting wins and losses. The "wins" are included in adjusted gross income and the "losses" are included in itemized deductions. The amount of adjusted gross income (AGI) determines how much of your actual itemized deductions are allowed by the IRS. In essence, gaming losses (itemized deductions) may be "reduced" based on the level of AGI, thereby raising tax liability.

I have also witnessed the liberal interpretations of gaming winnings by the IRS as opposed to their critical interpretations of allowable gaming losses. For instance, a close friend of mine was assessed over $8,000 in back taxes from slot winnings when he couldn't produce the "acceptable IRS standard" for his claimed losses - the date, time, and serial number of the slot machines he played for the losses. Please tell me who maintains records of the serial numbers of the slot machines you play!!!

The tax consequences of dealing with W-2G income can be painful. Better to play the table games where there is no W-2G involved.

Ron