[Josy]

not entirely correct
I'm guessing you are an Aussie?
gambling winnings are exempt from tax so long as you are not conducting a PROFESSION or BUSINESS of gambling
how much or little of your total income is from gambling is irrelevant in theory at least, although one would expect that if you are gambling as a business or profession it would be a relatively high proportion but if for example you are say a wealthy retiree with a significant income from investments or superannuation you may be held to be conducting a profession or business of gambling despite your investment income being greater than your gambling income.
on the plus side I understand that a court has never ruled in favour of the tax office against a "mere punter", i.e. one who has no direct connection with the racing or bookmaking industry

Thanx Hareeba for clarification. Yes I reside now in Oz.
And yes I heard that UK (and Au has the same "laws") made a decision that gambling income is not taxable. I guess you need to provide some income from other source claiming it's enough for living.
Anyway from some point of view I am lucky to be here.

wildemu: thanx for answer. Than my posts are not helping you sorry.

[Ian]

Connecticut is the only one that I know for sure but there are more.

Massachusetts is like this too. It's a very stupid law, it basically encourages anyone who plays poker to become a tax cheat. Every time you rack up a win, that gets taxed; every time you lose, you can't write it off.