I agree with the answers provided above, but with one caveat. Illegal business activities are not allowed to deduct business expenses. So reporting the illegal gambling winnings on a Schedule C would mean that no expenses can be claimed. This would subject the gross winnings (from illegal gambling) to Self-Employment Taxes. This will increase your taxes, and not provide you with the benefit of deductible expenses.\n\nSo, I would list this income as gambling winnings, with losses reported on Schedule A as an itemized deduction.\n\nHope this helps.\n\nWilliam
Should a professional gambler who file Income Tax as a gambler, report losses & wins from online gambling?