So there are three possibilities here:
1) He was playing poker, which you can actually have an edge at since it's against other people and not the house. There was substantial money to be made from the early-late '00s even with a fairly basic level of skill. It got harder over the years though, and now you have to be really good just to grind out a moderate salary at online poker (and I'm not sure it's even possible in the U.S. anymore). Throw me with my current knowledge and skill back to 2002 to play online poker and I would make over a million dollars a year, no exaggeration.
2) He's really good at analyzing sports and was able to make good bets on that. Extremely unlikely, but again easier 10 years ago IF he had complex proprietary computer simulations and figured things out that have only become common knowledge more recently.
3) He was a scammer. That's what actually happened, because otherwise he would just come right out and say he played poker. Online casinos used to give big bonuses both for signing up and also weekly/randomly/monthly. If you played games that have a minimal casino edge and only played the minimum required to "clear" the bonus requirements (you were required to play a certain amount before they'd let you withdraw), you could be expected to make a tidy profit in many cases (this can be easily figured out mathematically). Again, if I could go back to 2002-2006 and play online casinos I could make a good amount of money. Over $10K in easy added income a year for sure, I don't really know what the ceiling was if you were doing it legitimately. But to make the type of money he's talking about, he was scamming.
What he probably did was constantly, fraudulently sign up for "new" casino accounts in order to get the large sign-up bonuses. Use friend/relative names, use fake names, open up new bank accounts, etc. For each new identity it was likely possible to make at least $10K in start-up bonuses alone in the first couple of weeks, plus the frequent weekly/monthly bonuses.
There are additional possibilities such as becoming an affiliate of the casinos, referring people, etc., but his main way of making money was almost certainly scamming.