I disagree with @@ColeenD3 because of the case law cited by @dakrebs https://ttlc.intuit.com/community/taxes/discussion/re-can-gambling-losses-be-deducted-[product key removed]ngs-reported-on-a-1099-misc/01/2536279#M908987
dakrebs
2 weeks ago : " ...
Tax Court case, Libutti vs. The Commissioner dated March 7, 1996. In that case, a heavy gambler (Libutti) spent millions of dollars gambling at a New Jersey casino. The casino, in turn, and as an enticement to frequent the casino, gave Libutti expensive gifts, including exotic cars, diamond jewelry, expensive travel vouchers, etc. exceeding $2.5 million in value. The casino issued 1099-Misc forms to Libutti for the value of these "comps" or gifts and Libutti, in turn, applied his gambling losses against all of the 1099-Misc income. The IRS took the position that Libutti could not offset his losses against such gifts (comps). However, the Tax Court sided with Libutti, in essence saying that the strong relationship between his gambling activities at the casino, and the casino's providing comps or gifts to Libutti all fell into the meaning of "gains from wagering activities" and, therefore, he could offset his losses against both the wagering winnings (gains) as well as the comps (gains). They pointed out the obvious in saying that such gifts or comps never would have been given to Libutti except for his gambling activity. In other words, the character of his gains was the same regardless of how they were received or on what forms they were reported. There is a similar relationship between gains from slot machine play, and gains from drawings where the tickets for the drawings are earned because of, and only because of, machine play. Though the gains from the slots are reported on Form W-2G, and the gains from the drawings are reported on Form 1099-Misc, the wagering losses for machine play can be offset against both.
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