This is where it gets tricky though. If you go to the casino and walk out with a $2,500 slot winning and go back to the casino and lose $2,500 the next time, you still owe taxes on the first $2,500 and can include the losses if you itemize. I get that.
For an online casino though, if you play 10,000 hands of blackjack at $1 per wager, your total stakes wagered is $10,000. Now lets say your total bet winnings from those 10,000 hands was $10,100 (never more won than $5 per hand lets say). So your net win / loss is $100. You wouldn't owe taxes on $10,100 because that's what you won over 10,000 hands, correct? You'd be subject to thousands of dollars in tax simply for playing a lot of small hands. The taxable winnings seems like $100 in this example.
