Yes, you will have to itemize deductions if you wish to deduct your deposits in the sport book you lost in. However, the $5,000 you deposited into Caesars, has already been deducted, because the W-2g will be for the $5,000 you won and not the $10,000 you withdrew. If you are taking the standard deduction, you will be taxed on $5,000 as opposed to $3,000.
