This is confusing (specifically the second sentence regarding tax withheld: "Losses are an itemized deduction that go on Schedule A. They are only deductible up to the amount of tax withheld from all of your other income combined."
Per my experiences in TurboTax, losses are only deductible up to the amount of the gambling winnings. Also, per the IRS Interactive Tax Assistant: "The amount you deduct for gambling losses cannot exceed the amount of gambling winnings you report."
