I was under the impression that losses were not deductable for skill games, however I just looked at about 10 different articles for daily fantasy sports and they all had the same tone;

1) The site would only send out a 1099-Misc if NET earnings is over $600. This goes against how I was intreperting the situation. I interpreted it as if you had $2000 in wins and $1200 in losses, even on the same site, you had $2000 in income.

2) Other expenses from this "hobby" income may be deductible, including study material, travel...etc.

3) If you are a professional, you can file schedule C, just like gambling (although I don't know why you would if you can classify it as a hobby and get all of the same deductions without paying the self employment tax).

So how much of this is true and how much is still unknown? And if this is true, why wouldn't we want poker classified as a skill game?

What are the chances that somewhere down the road, daily fantasy is classified as gambling? Is it possible that it could be considered a skill game as far as legality goes but gambling in the eyes of the IRS?

As a hobby, the expenses would only be deductible as a Misc Deduction on Schedule A Itemized Deductions. Your total Misc Deductions are only deductible to the extent that they exceed 2% of your total Adjusted Gross Income.