Pretty much what HKMk23 wrote. Your winnings are taxable, but you can write off your losses. IRS has no way of knowing what your losses are. Unless you get audited, you can show what ever losses you need to (I am NOT advocating committing fraud here.) You need to keep records of your losses or the IRS won't accept them under audit.
By the way, all this Bill does is limit the way one funds their account and cashes winnings.
Thank you. Your explainations/comments seem reasonable. I really appreciate your insite.
"You need to keep records of your losses or the IRS won't accept them under audit."
What would you recommend for these records? If gambling at a casino, is it possible to get a receipt for the chips purchased or would a "record book" be valid?