Gambling losses are indeed tax deductible, but only to the extent of your winnings and requires you to report all the money you win as taxable income on your return.
If you are itemizing and you already entered into the return your gambling winnings and losses, then the losses are a part of the Sch A deduction
The winnings go on the Sch 1 and then the 1040.
The deduction is only available if you itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses.
The IRS does not permit you to simply subtract your losses from your winnings and report your net profit or loss.
And if you have a particularly unlucky year, you cannot just deduct your losses without reporting any winnings. If the IRS allowed this, then it's essentially subsidizing taxpayer gambling.
The bottom line is that losing money at a casino or the race track does not by itself reduce your tax bill.
You need to first owe tax on winnings before a loss deduction is available. Therefore, at best, deducting your losses allows you to avoid paying tax on your winnings, but nothing more.
