Gambling typically does not pay. Unlike investments such as stocks and bonds, which have a positive bias, gambling has a negative bias. This means that the longer one gambles the more likely they will lose money as the odds or percentages will eventually catch up to them. After all, if the house is taking their cut, then the payouts must be less than the amounts gamblers are putting in. This means the average payout must be less than the amount put in by each gambler, with some being luckier than others and coming out ahead, but many reporting losses.
The stock market is often incorrectly compared to gambling. This comparison is not accurate because while the stock market may be uncertain and risky in the short-term, historically the longer one invests the more likely they will be successful and earn a positive rate of return.
The tax treatment for gambling is unfavorable and has gotten worse recently. Starting in 2026, new IRS rules for gambling losses will put new limits on gambling losses that can be deducted against gambling winnings. This will limit deductions to 90% of your winnings, not 100% as in the past.
Taxpayers still have to itemize their deductions to claim gambling losses, but even if they itemize their deductions the reduced loss deduction of 90% of winnings will create some taxable income and therefore some tax due on gambling winnings, even if the overall result for the year was losses. For example, if a player breaks even by winning $10,000 and losing $10,000, the player will only be able to deduct $9,000 of the losses, therefore still being responsible for $1,000 in taxable winnings from gambling.