Interesting choice of first post about this "friend" of yours, but I'll play along.
Depends on the casino. He has to cash in/out chips at the cage, and some casinos
will ask for tax ID info (although usually for big tourney wins, not sure how many do that for cash).
Modern US financial laws aimed at anti-terrorism and money laundering, particularly post-Patriot Act, require large or suspicious cash transactions to be reported. For example, if you deposit 10K cash or more at a bank, they're required by law to report it to the government. Below that amount, if they are suspicious, they also must report it. While he might able to get around that as far as keeping it in a safe deposit box (other than perhaps a nosy/observant bank employee), you can't do too very many large $$$ transactions like buying a 300K house for cash without running into a reporting requirement or piquing suspicions somewhere.
I would say his clock is ticking. That said, such things tend to be really slow to catch up with people, and probably moreso now that the IRS is under such scrutiny. But when it does catch up, for large sums of back taxes with all the penalties and interest tacked on, it's often a huge amount to deal with. Not something you want to be taking a chance with, IMO.