All income is taxable. Fantasy sports can fall under either Hobby Income or Gambling (if certain conditions are proven). In most cases, it will be hobby income and be listed on the 1040 form on line 21, “Other income.”
The IRS concluded in a 2005 letter ruling that the net method must be used when entrance fees are only netted against winnings from that particular contest as a return of capital—entrance fees on losing contests are not deductible against winnings from other contests. In other words, only entrance fees can be deducted from leagues you have won.
Here's the kicker, these deductions can only be taken when you itemize your taxes instead of the standard deduction. To make matters worse, it's only when it's greater than 2 percent of your adjusted gross income. If your AGI is 100,000, then 2% is $2,000. If you win 3 $1k leagues, then you can deduct $1k as expense ($3K in league fees less the $2k (2% of AGI).
It's complicated, but more info can be found here:
https://www.journalofaccountancy.com/newsletters/2016/feb/how-to-report-fantasy-football-winnings.html