The losses do not always negate the winnings.
Gambling winnings are taxable income. They are reported on 1040 line 21 as income.
Gambling losses can only be up to the amount of your winnings and are reported on Schedule A line 28.
If you do not have enough deductions to itemize and use the standard deduction instead, the gambling losses are not counted.
https://www.irs.gov/taxtopics/tc419.html
