Money or prizes have tax consequences, however the earnings are typically treated as hobby income (not gambling).
This is because fantasy leagues are not based on an actual team and winnings are not dependent upon the scores or performance of a real team.
For tax purposes, fantasy sports are considered a recreation activity (a hobby).
Therefore, you still have to report the winnings on your Federal tax return. If you earn over $600, you’ll receive Form 1099-MISC. if this were gambling winnings would be reported on w-2G.
Hobby expenses are no longer deductible even when you make income from it.
that's due to the Tax Cuts and Jobs Act effective 2018-2025. if you were considered engaged in gambling, the expenses would be deductible but only if you itemized your losses (limited to income) on schedule A
