I've never seen this done in a serious way before. I'll talk trash, and have it done to me, but it's always by guys where we are close in talent level, and it's always in a playful manner.
I had a coach in juniors, anytime one of the kids would smart off about bowling he'd offer to bowl for 1 dollar per pin. No one ever took him up on it. It seemed to be a pretty quick way to put someone in their place without being a total jerk about it.
I don't know what the rest of your league averages, but it sounds like this guy doesn't like the fact you're so much better than him so he knows he can't be competitive. Even in work/fun leagues people want to win. (Not trying to excuse his behavior, cuz he sounds like a major tool)
Physical violence will only end bad for YOU. Since it's a work league you risk losing your job, going to jail, being ostrasized for beating up a weaker invidivual, etc.
Since ignoring him doesn't work, either ask him in private what the problem is and for him to stop, or punk him out in front of everyone. Challenge him to $500 a game where you'll even spot him like 50 pins. At that point it's put up or shut up...he'll shut up.
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It IS next year!