Because it's damned hard to tax gambling winnings when they happen outside the US government's jurisdiction. A brick-and-mortar casino in Vegas will issue you a 1099 if you win enough; a virtual casino in Antigua is under no such obligation.
There are tons of affiliate marketers online making money from non-US affiliate networks. By the same logic we should ban affiliate marketing in its entirety too - none of those networks issue 1099s...
2. Attacking traditional vices like gambling can be a political slam-dunk. Just the same as counting the number of convictions under your belt to appeal to 'law and order' types of voters.
3. US casinos probably make some amount of political contributions. Banning foreign gambling sites cuts competition.
http://www.irs.gov/taxtopics/tc419.html http://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Can-...
States and cities have varying laws. Basically most states with casinos allow you to do the same as on federal returns. Those without require you to report all wins as income and not deduct losses, effectively making it impossible to gamble with any regularity (since you could easily owe taxes on $200k of income, of which you only saw $10k... or worse, -$10k).
Pros can simply net their wins/losses (while maintaining a record-keeping notebook). To qualify as a pro you have to derive almost all income from gambling.
Gamblers get worried when people want to close tax loopholes (such as itemized deductions for certain things). They can come scarily close to losing their way of making a living.