Working for cash pay and not reporting income

Yes, but presumably, unlike our hypothetical money launderer, it wouldn’t be hard for them to produce a paper trail proving that they actually are professional gamblers who play in poker tournaments, frequently stay at casinos, etc.

Former handyman here…
I used to visit Home Depot 3 or 4 times a week at least. I was frequently behind contractors who paid for their purchases in cash - certainly more often than not. And these were purchases of several hundred dollars. I’d say it’s pretty rampant.