Very interesting scenario here.

I agree the government has already had their take from the Tote, so how can they further justify taxing a winning punter.

If I went on "Who wants to be a millionaire" and won the million dollars, and that was my only source of income - could they then tax me?

I think not.

The burden of proof is on the Government and unless they could track every cash wager, they then would be hard pressed to prove anything.
As you say becareful, I would love to be able to claim internet expenses, pay TV subscription, fuel expenses, computer depreciation etc. and any LOSSES.

It's just not going to happen.