treasury REG § 1.165-10 Wagering losses.
Losses sustained during the taxable year on wagering transactions shall be allowed as a deduction but only to the extent of the gains during the taxable year from such transactions. In the case of a husband and wife making a joint return for the taxable year, the combined losses of the spouses from wagering transactions shall be allowed to the extent of the combined gains of the spouses from wagering transactions.
filing jointly one spouse's losses can offset the other spouse's winnings. netting is not allowed so while one spouse may have a net loss of $10K if they have winnings and losses the winnings must be reported as income
example: spouse A has $20K of winnings and $10K of losses. spouse B has $10K of winnings and $20K of losses. filing jointly winnings to report $30K losses that may be deducted on Schedule A $30K
This is Federal law. it's possible if you have a state income tax its rules might be different.
