There is a way to deduct losses incurred within a 24-hour period, but the taxpayer needs to keep track of that. Ie., funds when started gambling, winnings, amount left at end of the 24-hour period or when quit gambling. This applies to slot machine gambling. Losses tracked during the 24-hour period may be offset against the gross winnings on “other income” line of the return. The amount spent to generate a gain, reduces the gain (rev Rul 83-130 and Hochman,T.C. Memo 1986-241. I had a letter audit on this for a client and it stood up.