According to New Jersey Tax Bulletin TB-20(R):
1. ALL gambling winnings* are subject to New Jersey Gross Income Tax.
2. Taxpayers may deduct "all types of gambling losses" from their total gambling winnings, not to exceed the total of the winnings.
https://www.state.nj.us/treasury/taxation/pdf/pubs/tb/tb20r.pdf
* NJ exempts the first $10,000 of New Jersey Lottery prize amounts from NJ taxation
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
