61 Pa. Code § 103.17
Gambling and lottery winnings, other than prizes of the State Lottery won on or after July 21, 1983, shall be taxable. These consist of gains arising from gambling and lotteries. In calculating gains, the taxpayer may deduct gambling and lottery losses, other than losses incurred in the State Lottery on or after July 21, 1983, but may not deduct the costs and expenses incurred in connection with the gambling and lottery activity. In addition to the other recordkeeping requirements under Article III of the TRC of 1971 (72 P. S. §§ 7301-7361), the taxpayer shall maintain detailed records substantiating losses. The taxpayer shall have the burden of proving losses.
61 Pa. Code § 103.17
The provisions of this §103.17 issued under section 354 of the Tax Reform Code of 1971 (72 P. S. § 7354).