more correctly, gambling losses are only deductible to the extent of gambling winnings. the deduction is on schedule A. the fact that your medical expense deduction will be eliminated should be of no federal consequence if your taxable income without this deduction is already zero. or a loss. however, if you have a state income tax this might have an effect.
failure to properly report your gambling winnings can result in civil and/or criminal penalties
In extreme cases, not reporting winnings can lead to criminal tax fraud charges—up to 5 years in prison and a $250,000 fine. The IRS has already convicted dozens for this.
and of course, Social Security would seek to recover those underpaid premiums, probably by taking it out of your social security benefits to the maximum each period allowed by law.
