You are required to pay taxes whether any paperwork is generated. Splitting transactions into smaller ones in order to avoid detection is in itself a crime (structuring, aka "smurfing") with potentially much greater punishments than mere tax evasion. Winning hundreds of thousands of dollars would generate plenty of interest from casino management, not to mention the fact that the casino itself can be punished if it fails to report a series of transactions whose sum exceeds $10,000 in one day.
Yes this quote is absolutely a matter of fact and law. But in the real world especially here in the USA, tax evasion in every form is common practice. Have you been reading about our congressmen, senators, and appointed public servants lately over here. I don't even want to get started with big business. Three recent appointees this past year couldn't even take office has a result of past tax evasion. There must be at least 4 or 5 others we read about everyday here under investigation for the same. These investigations usually involve millions.
I also understand it is righteous and the liability of every citizen to do the right thing. But I can't recall reading one article, or seeing one newscast about one single casino ever reporting any player for tax evasion any where in the world.
Big hits on slot machines are obviously reported. Forget about big hits, you can't even get away with anything over $1200.00 dollars.
Making a huge hit at the tables over 50k usually involves a high roller. If he uses friends and family to cash out to avoid taxes, and even if the casino knows it, no such reporting will ever occur. They would surely be losing a good customer, with no chance of ever getting it back. Sorry, it's just not gonna happen.
Imagine reading an article or seeing a news report about a casino turning in a customer for tax evasion, and three of his buddies also being charged with facilitating tax evasion. They might as well close the doors.