The IRS treats it as if they were self-employed. The players fill out Schedule C (Business Income) and Schedule SE (Self-Employment Taxes).Also, as part of"the war on drugs", ANY time $10,000 changes hands, the IRS must be notified by the casino. So in the big games where everyone brings in $100,000 cash to play, the IRS gets the final results from everyone at the table. They don't need hand-by-hand results, but they get notified as each player cashes out. There's no evading it.