'The X Factor' USA mentors reportedly placed the wager at the beginning of the second series that one of their act's would be crowned the winner, which would see the victorious judge win USD 20,000.
Cowell, 53, lost the bet when Reid's act Tate Stevens received the highest number of public votes and was announced the champion, reported TMZ online.
"Simon hasn't displayed any signs of being a sore loser and plans to send his rival - (who recently announced he would not return to the reality series next year after two seasons on the judging panel) a cheque as soon as possible," a source said.
Cowell recently said that Reid is already regretting quitting the show to concentrate on his job as chairman of Epic Records.
