[Guthrie]

Lots of people have staking agreements. I think Fossilman had one when he won the WSOP, and this year's second place winner had his backer there with him. Surely these people didn't win millions without giving some thought to the tax consequences.

I'm no tax expert, but the method you describe, where your dad gives you a tax-free gift, you win a lot of money, and then "give" him back his share, sounds like a tax minefield. You and your dad could well end up paying double taxes on the profits if you don't take the proper steps up front to avoid it.

I had a lawyer assure me once that a contract for illegal activity is quite enforceable, and the IRS doesn't care if the income is illegal or not, they just want their taxes.

If you're dead set on doing it, get proper legal and tax advice up front and save yourself a lot of misery down the line.