It was strange enough that online gambling losses weren't reported for deductions (now that US seems to want to ban it entirely), maybe people in general just don't realise losses are deductible?
It's different for gambling. Professional (self-employed) gamblers can deduct losses as a business expense, so they only pay taxes on their net gains. Casual gamblers aren't allowed to deduct losses if they take the
standard deduction, so those people pay taxes on all of their wins and can't deduct any of the losses.
Professional traders can similarly deduct capital losses as a business expense, limiting taxable income to net gains. Non-professionals have to cap those deducted losses at $3K which is much worse.
One might ask, why doesn't everyone just report as self-employed? The answer is that self-employed people pay an additional 15.3% tax
on top of the personal income tax.
The IRS screws you no matter what!