credit risk of betting someone else's side bet

[beta]

Sometimes side bets can be +EV. But maybe not if there is a lot of credit risk.

There were no seats available for me at a table, but I wagered on one of the side bets anyway. The dealer said the player sitting in the chair had to touch the side bet for it to be an active wager. Does that mean I am technically giving him the money and just trusting that he will return my winnings?

I once played at a casino where they don't allow betting on other players' side bets because "One person ruined it for everyone." What does that mean? Can I get screwed over by doing this? Is it relevant if a casino is Indian-run?

[Joe Mama]

It can get pretty sticky on a large payoff with tax implications if you do not have an agreement in place ahead of time. Who pays the tax?-my guess is the person at the table. How much to withhold? How much does player at table get percentage wise of big payoff?

[20 to 1 Spread]

It can get pretty sticky on a large payoff with tax implications if you do not have an agreement in place ahead of time. Who pays the tax?-my guess is the person at the table. How much to withhold? How much does player at table get percentage wise of big payoff?

You don't report it because you didn't win any of that money. The IRS isn't going to go after you for that. If by some weird reason, you get a form notifying such agencies that you were paid out the X amount, you simply just take a picture of the person's ID and give them the money. Then you give that picture of the ID to your tax person (assuming you don't do it on your own) who will then let the IRS know to go after them for the taxes and you've done your duty.

Disclosure: I just do AP stuff for a living and pretty ignorant about most other topics in general.