Should poker pros be taxed?

[AlunB]

I've asked this over at THM, but wanted to see what people here think too. Simple question. I'm talking about the UK here, where hopefully we all know the law. They are not (it's not a trade etc etc). But should they be? Now obviously I'm expecting 99% of people to say of course not they should never be and anyone who says otherwise is an idiot. But, would you say the same if you weren't a poker player? And why shouldn't winning professional poker players be taxed? Should footballers be taxed? If so why and what is the difference? Obviously a professional should be decided in the same way as any other self-employed status.

[Nade]

Re: Should poker pros be taxed? Don't mention the T word :loon.

[happyhornet]

Re: Should poker pros be taxed? For me, the obvious difference is that pro poker players (or indeed any of us) dont have a wage, per se, from poker. They gamble with money and win or lose dependant on the their skill and luck. The comparison with pro footballers falls down in that they don't forfeit their wages based on a bad performance (unless they play for Pompey and then they just forfeit their wages anyway!!).

[GaF]

Re: Should poker pros be taxed?

Now obviously I'm expecting 99% of people to say of course not they should never be and anyone who says otherwise is an idiot

Looks like I'm in a minority then :loon Given that we accept that taxation is necessary in society as a whole, in order for the government to provide the services we want for the social good, and ignoring the practical difficulties of how to measure a poker players tax rate (which countries that charge tax presumably overcome), then I cannot see any reason why Poker Players shouldnt pay their fair share of the tax burden - they are afterall consumers of the services provided with centrally raised taxation, and they earn their living through playing poker. On a slightly related topic, given that the UK is tax free for poker players, and given that online players can locate themselves anywhere, I'm surprised that there hasnt been mass immigration of poker pros into the UK. How many of us (non professional poker players) wouldnt emigrate abroad if we could carry out our chosen profession completely tax free elsewhere, with the same gross earnings?

[AlunB]

Re: Should poker pros be taxed?

For me, the obvious difference is that pro poker players (or indeed any of us) dont have a wage, per se, from poker. They gamble with money and win or lose dependant on the their skill and luck. The comparison with pro footballers falls down in that they don't forfeit their wages based on a bad performance (unless they play for Pompey and then they just forfeit their wages anyway!!).

Lol. That's a good point mate. But obviously nobody is going to be taxed UNLESS they are winning money and over the same tax threshold as anyone else. So nobody would be paying tax on poker winnings unless it was their main source of income and were earning at least £6k a year or so. And it would be an end of the year thing like any other self employed person.

[Jenspm]

Re: Should poker pros be taxed? I definately think they should. The point of a tax system in a society is that everyone contributes 'for the greater good', therefore all professions should be taxed. There is something fundamentally wrong about a professional poker player not taxing his income and leeching off the goods from a countries tax payers.

[Nade]

Re: Should poker pros be taxed? We pay enough tax in rake.

[w1nsome]

Re: Should poker pros be taxed? Surely they must put in a tax return yearly??[self employed]and if they owe--- they pay tax ----- Or are they just milking the system,LIKE EVERY BENEFIT CHEAT.[Which i guess is more truer to the fact] Was a case a few months back where benefits agency took some1 to court through his poker playing[winning]whilst claiming benefits

[Villagio]

Re: Should poker pros be taxed?

I'm surprised that there hasnt been mass immigration of poker pros into the UK. How many of us (non professional poker players) wouldnt emigrate abroad if we could carry out our chosen profession completely tax free elsewhere, with the same gross earnings?

^ Hence why so many pros have relocated to Thailand. Rakeback alone pays for living expenses, any profit allows you to live like a king over there in comparison. From Revenue & Customs: BIM22017 - Trade: exceptions & alternatives: betting and gambling: the professional gambler The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade. The case of Graham v Green [1925] 9TC309 concerned a man whose sole means of livelihood came from betting on horses at starting prices. Rowlatt J says at pages 313 and 314:

“Now we come to betting, pure and simple… the man who bets with the bookmaker, and that is this case. These are mere bets. Each time he puts on his money, at whatever may be the starting price. I do not think he could be said to organise his effort in the same way as a bookmaker organises his. I do not think the subject matter from his point of view is susceptible of it. In effect all he is doing is just what a man does who is a skilful player at cards, who plays every day. He plays to- day and he plays to-morrow and he plays the next day and he is skilful on each of the three days, more skilful on the whole than the people with whom he plays, and he wins. But I do not think that you can find, in his case, any conception arising in which his individual operations can be said to be merged in the way that particular operations are merged in the conception of a trade.

I think all you can say of that man ... is that he is addicted to betting. It is extremely difficult to express, but it seems to me that people would say he is addicted to betting, and could not say that his vocation is betting.

The subject is involved in great difficulty of language, which I think represents great difficulty of thought. There is no tax on a habit. I do not think "habitual'' or even "systematic'' fully describes what is essential in the phrase "`trade, adventure, profession or vocation''.’

This shows that having expertise or being systematic (‘studying form’) is not enough to create a trade of being a ‘professional gambler’. Some ‘professional gamblers’ do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward. Whether their gambling winnings are proceeds of that trade would depend upon the facts. That's from 1925 though, but I believe this is why we still don't pay tax on gambling winnings. But if I weren't a poker player, I'd say tax em!!!

[Beekeeper]

Re: Should poker pros be taxed? Well the argument is that if you tax the winners you should also allow tax relief on the losers. Since poker is a zero sum game the net revenue gain should be zero.

[SteveO]

Re: Should poker pros be taxed? No they should definitely not pay tax as it's a form of gambling. If they did tax it then winnings from the bookies would also become taxed and then it's a downward spiral.

[Villagio]

Re: Should poker pros be taxed?

Was a case a few months back where benefits agency took some1 to court through his poker playing[winning]whilst claiming benefits

Is this right? I thought about this situation t'other day. Wonder how much he made through poker? Have to be a bit cheeky (putting it politely) to be making decent money but still signing on! Until they acknowledge poker as a game of skill I wouldn't have thought they could take someone to court though? Would they do that to someone who bets on horses and wins? Same thing, as far as the law goes anyway, isn't it?

[GaF]

Re: Should poker pros be taxed?

We pay enough tax in rake.

To (a lot of) offshore companies who dont contribute anything to the UK welfare system....

[GaF]

Re: Should poker pros be taxed?

Well the argument is that if you tax the winners you should also allow tax relief on the losers. Since poker is a zero sum game the net revenue gain should be zero.

Would it not be in the same way as any sole trader? If you make a loss in any year, you dont get a rebate, but can offset the following years profit against that loss. There is a difference between profesional players (with a positive expectation) and leisure players (with a negative expectation) - professional players shouldn't expect a "zero sum game" for themselves - if they do, then they're not very good professionals :tongue2 Of course, tax is against profit and loss and not cash flow, so it should be based on Sklansky Bucks rather than actual winnings :tongue2

[w1nsome]

Re: Should poker pros be taxed?

Is this right? I thought about this situation t'other day. Wonder how much he made through poker? Have to be a bit cheeky (putting it politely) to be making decent money but still signing on! Until they acknowledge poker as a game of skill I wouldn't have thought they could take someone to court though? Would they do that to someone who bets on horses and wins? Same thing, as far as the law goes anyway, isn't it?

-------------------------------- Disabled online >poker player caught cheating | Online Poker ...

[GaF]

Re: Should poker pros be taxed?

No they should definitely not pay tax as it's a form of gambling. If they did tax it then winnings from the bookies would also become taxed and then it's a downward spiral.

Should people pay tax on stock market investments? Isn't that just a form of gambling? What's the difference?

[ColU_FC]

Re: Should poker pros be taxed? Totally unenforceable, therefore pointless. It could only ever be an honesty tax, there would be no way the Inland Revenue could verify a tax return.

[Villagio]

That benefit fraudster was a bit more than cheeky then! But lol at the fines.

Totally unenforceable, therefore pointless. It could only ever be an honesty tax, there would be no way the Inland Revenue could verify a tax return.

Anyone know how the IRS enforce it in the US? From reading other forums I know that they do, but not sure how exactly.

[Nade]

Re: Should poker pros be taxed?

Anyone know how the IRS enforce it in the US? From reading other forums I know that they do, but not sure how exactly.

In the US the players have to fill out forms to show how many tournaments they've played but not sure how they calculate cash totals. There was a famous case with David Benefield complaining he lost a fortune in tax. Looked for the blog post but seems to have been deleted, here's the forum post from http://forumserver.twoplustwo.com/29/news-views-gossip/david-benefield-2-5-million-downswing-423440/

I am on a 750k downswing in poker (500ish today), and I just figured out my tax total that comes to around 1.1 or 1.15m. This means, I am down 2.5 million dollars. Now, that is a lot of money in anyone’s book. I highly doubt I am as rich as some of you all think (especially now). Anyways, I was feeling pretty ok about the tax thing when I thought I had to pay out about 700-750kish. That was something I could handle. I mean, I can handle the 1.1-1.15, but I am really really unhappy about it. I know I can be like wow I am so lucky to get to pay that much money in tax! That means I made a whole lot! Well, yes, and no. See, the retarded stupid idiotic tax system in the united states stipulates that say, I make 500k in 2008 from Jan 1 to Dec 31 and leave it all in my FTP account. Then, on Jan 1 2009, I blow it all up, I lose EVERYTHING, all of my money. Well, the US government still wants its 230k or whatever in taxes. So, you are busto, ran it all up on a freeroll, have no job, no skills, and will be paying off that 230k in taxes for the rest of your life. Isn’t that awesome? I think it’s awesome. I wish my downswing happened at the end of last year instead of the beginning of this year. I have nothing to write my losses off against now, which is absolutely ridiculous. So basically, I need to go on mega heater for the rest of the year and cross fingers I break even. Isn’t that stupid? The last thing I want to do right now is play poker, but over the next year I am going to have to play a bunch just so I don’t get screwed on taxes. Sweet.

[AJ]

Re: Should poker pros be taxed?

Now obviously I'm expecting 99% of people to say of course not they should never be and anyone who says otherwise is an idiot.

Not sure why you expect this response, when it's an obvious yes for me. The important word of course is professional, they should of course only pay tax on net winnings over a year.

[Nade]

Re: Should poker pros be taxed? I think he expects that response as he deals with professional poker players day in day out and any pro gambler will do anything to not lose money and so not being taxed is a pretty obvious choice ;).

[glceud]

Re: Should poker pros be taxed? Its a catch 22, if you start taxing poker players many will move to a country that doesn't so that money is lost to the economy. Most are youngish single guys without any ties. The British government missed out big style by delaying the abolition of betting tax when we were miles ahead of the world in sports book betting and the technology involved. Regards allowing poker players their normal tax free allowance, were do I fit in? I make more than 6k a year but would struggle to meet the national minimum wage in Latvia.

[AJ]

Re: Should poker pros be taxed?

Its a catch 22, if you start taxing poker players many will move to a country that doesn't so that money is lost to the economy. Most are youngish single guys without any ties. The British government missed out big style by delaying the abolition of betting tax when we were miles ahead of the world in sports book betting and the technology involved. Regards allowing poker players their normal tax free allowance, were do I fit in? I make more than 6k a year but would struggle to meet the national minimum wage in Latvia.

The wider point of course is that the tax system is fundamentally flawed and overly complex to administer. I don't think that taxes on income are a good thing in principle, tax should be raised on consumption. That way savings and investment would be tax free. Abolish income tax, raise VAT 35% and remove all VAT exceptions. Food clothing whatever. VAt on everything. It'd be revenue netural for the state and closes jsut about every loophole and brings the black economy (drug dealers, whores, poker players etc) who don't pay income tax into the system. VAT is a very hard tax to aviod, everyone needs to buy food and petrol. Problem solved and as a bonus, thousands of civil servents and tax lawyers out of a job.

[AlunB]

Re: Should poker pros be taxed? That system is basically what they have in places like The Bahamas where everything costs a fortune so people go to Miami to go clothes shopping. Not saying it's a bad system, but the ferries would be rammed with people going to Calais to go shopping and claiming freedom of trade etc etc I'm not sure people would move Ed. Even those with no ties have mates and girlfriends and all sorts of reasons to stay in a place they grew up in and love. We're not overrun by the overtaxed scandi poker players are we? And Nade? Spot on. It's enough to make a man cynical! :lol

[Nade]

Re: Should poker pros be taxed? I hate this thread and hate to bump it BUT someone in an unrelated thread on 2+2 says that poker isn't taxed in Britain as it is classed as a game of chance so if it is ever proven as a game of skill here it will be taxed. Is that right?

[Sir Puntalot]

Re: Should poker pros be taxed? If they are professional, then of course they should be taxed. I understand that the Danish Tax authorities have a 400 strong team, to identify Danish winners in Vegas and around the world - I kid you not. Gus Hansen although Danish, is based in Monaco to avoid the 63% tax he would have to pay in Denmark, which is the top level. The average is 43%, the highest in the world.

[voiceofjoe]

Re: Should poker pros be taxed?

We pay enough tax in rake.

Don't think the Chancellor sees an awful lot of this though - ;) You may have an idea though Nade, why not the goverment take something akin to the money the players get from rakeback schemes. They aren't actually taking tax out their winnings then - Just get Stars and FT to pay any rakeback due to the goverments of the players country - then the players can survive solely on their on table profits :ok

[AJ]

Re: Should poker pros be taxed?

That system is basically what they have in places like The Bahamas where everything costs a fortune so people go to Miami to go clothes shopping. Not saying it's a bad system, but the ferries would be rammed with people going to Calais to go shopping and claiming freedom of trade etc etc

Bahamas is a small country though, seriously doubt that people in sheffield would go to france to put petrol in their car.

[Matt]

Re: Should poker pros be taxed? Of course they should. "Professional" - thats it.

[GaF]

Re: Should poker pros be taxed?

I've asked this over at THM' date=' but wanted to see what people here think too.[/quote'] Just looking at THM thread - only read the first page so far - but seems a very different set of views to here - 81% in the Poll saying "No Tax" for professionals! Thread is here - http://www.thehendonmob.com/forum/viewtopic.php?t=33849