Casual gamblers may not realize they can deduct their gambling losses as professional gamblers do. They can, but there are some things to note, said Erb. First, you may deduct Canadian casino gambling losses only if you itemize deductions, which Erb said is only a third of tax filers.
Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos, cash winnings and the fair market value of prizes like cars and trips.
Second, the amount of losses you deduct can't exceed the amount of gambling income reported on your return.
As a professional, if you have a gambling loss that exceeds your winnings, you cannot deduct the loss. Your tax loss from the business of gambling can exceed your gambling income but not your gambling loss.
"If it's your real job and you lose money, then you can deduct those losses," she said. "But if you're just a casual gambler, you're out of luck if you always lose."
In a note to casual gamblers, the IRS explains that casual gamblers must have receipts for their losses on gambling.