I've been having a lot of trouble with finding a good answer to a tax question I'm having.

Normally recreational and degen gamblers can write off their gambling losses on Schedule A only up to their reported wins, including W2-G's and wins recorded via personal journal.

As some readers of this thread may know, this normally doesn't apply to any 1099's issued by casinos showing the retail value of prizes won (cash or not).

One casino had it in small print that you shouldn't write it off, yet there is an old IRS tax court ruling Libutti v. Commissioner which states that if there is a "strong nexus" between gambling activity and earnings from a 1099, then gambling losses CAN be written off from said 1099.

This has become an issue for me this year since I have won a bunch of drawings, but it required a lot of gambling at a loss in order to win the prizes. This is because of additional entries to drawings being granted with added play (eg. earn "X" number of points to gain another entry).

Ordinary members of the public can gain one free entry to the draws, which weakens the nexus explained in the Libutti ruling since anybody from the public can theoretically win, but the odds would have been astronomically against my winning what I did without lots of play generating comp entries.

Do I have a valid write off in this case? It's been a very tough question with professionals giving mixed opinions on this one.