Milo;263571 wrote10,000 players writing off their $100 buy-in is not going to be -ev for the feds when the winner is taxed on his $300k score. The % gained on the big number is more the the % lost on the small one.
IANA(tax)L, so ymmv.
If they start taxing winners at government run poker sites would it not make sense to start doing the same thing for all lotteries? I don't think they will do this and if they did it would be pretty unfair since they already take their fair share out of the proceeds. In order for things to be fair they would have to start taxing casino scores too. A lot of internet poker players will/should complain if they are taxed and live poker is not. That seems like a lot of change to squeeze out a little bit of money from a business model that is already extremely profitable for the government as is. The amount of longterm winners is ridiculously low compared to all the losers out there.
I could see a dangerous precedent being set by going after professional players for taxes with the current definitions of what a professional player is in the tax code. If you operate like a business and use skill to realize a positive expectation you can be considered a professional. What about all the people that use pokertracker, and read books but still find themselves losing? They can claim that they operate like a business and potentially be eligible for some pretty big tax write off's.
It'd be funny to see a bunch of people claiming they are part time professional gamblers reporting net losses on their tax forms.