In the US, all income is taxable no matter how it is obtained and no matter what the amount. I think that is how the feds finally got Al Capone, tax evasion. Even if you win $2.40 on a $2.00 horse bet, you are required by law to declare the $0.40. If you declare yourself a "Professional Gambler" you prepare a Schedule C tax form showing your income and expenses. And you better have sufficient documentation to back up EVERYTHING. If you just hit a big win at the tables one night, I think you declare the money as misc. income on Schedule A. DISCLAIMER: I am not a tax professional nor an accountant. I've just dreamed enough that I really looked into it. Edited to Add: Yes, it would be very nice to see his method.