A Taxing debate

[doubleup]

....The Camel's point with a discussion on the practicalities of such a law as opposed to looking at it and arguing the moral and ethical implications of not paying tax........

I suspect that the judge that gave the tax ruling was probably quite worldly wise.  I think that he appreciated that bookmakers had an edge and invited customers to take a bet and contrasted this with a Steve McQueen type figure, buzzing about, looking for a game and mostly winning, but always with the threat of a bad run or diminishing skills vs his opposition.

My main activity at the moment is place laying on Betfair.  I explained this to a friend and he said "that just seems a bit haphazard".  And it probably is, as most edges don't last (if they were there in the first place).

My point being that the judge was able to distinguish between the viable business of the bookmaker and the "haphazard" activity of the individual.  And I think there are a lot of people who might be getting by on gambling now, but have no guarantee whatsoever they will be in a few months.

There are obviously a few people who are so systematic and regularly profitable that they might be in a trade anyway - eg bot assisted arbers, market makers on betfair or heads-up bumhunters who only take action from recs - but the vast majority of "winners" can't hand on heart claim they will still be winners next year (in the same way that most businesses can).



    

[AlunB]

I just don't think, say, your typcal mid 20s online pro is going to run headlong towards private games and start hiding his winnings from the taxman. But maybe I am too naive.

Unlikely I agree, but then the online player would be at a huge disadvantage to the live player who could more easily hide their income.

Think I read that this was why the US tax system was unfair as MTT players got taxed but guys who played cash games could always hide it/ pay a token amount.

Also how many poker players, who haven't had to pay tax before, will have the foresight and discipline to put away 20-30% of their winnings for when their tax return is due.

Or even realise what happens in year 2. That's a right kick in the balls.

[AlunB]

Interesting discussion on the NFL and its tax status at the moment in the US

http://ftw.usatoday.com/2014/09/nfl-tax-exempt

[arbboy]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

I pretty much said this right at the start. It's never going to happen. If it didn't happen during the boom years of poker/arbing/sports betting pre recession it's certainly not going to happen now. Far more professional gamblers have moved onto other forms of income in the past three years than have joined the ranks so the net tax to collect from this group would be much lower than in 2006 when they couldn't care less.

[DaveShoelace]

Good thread about the November Nine this, well excited for the final now.

ie. mods maybe split this thread in two? Pretty good discussion on tax n that, probably should name it as such.

[The Camel]

I just don't think, say, your typcal mid 20s online pro is going to run headlong towards private games and start hiding his winnings from the taxman. But maybe I am too naive.

Unlikely I agree, but then the online player would be at a huge disadvantage to the live player who could more easily hide their income.

Think I read that this was why the US tax system was unfair as MTT players got taxed but guys who played cash games could always hide it/ pay a token amount.

Also how many poker players, who haven't had to pay tax before, will have the foresight and discipline to put away 20-30% of their winnings for when their tax return is due.

This is a spurious argument Ryan.

Every other self employed person has to "put money away" to pay his/her taxes.

Why shouldn't poker players?

It really isn't tough unless they are complete degens.

[arbboy]

I just don't think, say, your typcal mid 20s online pro is going to run headlong towards private games and start hiding his winnings from the taxman. But maybe I am too naive.

Unlikely I agree, but then the online player would be at a huge disadvantage to the live player who could more easily hide their income.

Think I read that this was why the US tax system was unfair as MTT players got taxed but guys who played cash games could always hide it/ pay a token amount.

Also how many poker players, who haven't had to pay tax before, will have the foresight and discipline to put away 20-30% of their winnings for when their tax return is due.

This is a spurious argument Ryan.

Every other self employed person has to "put money away" to pay his/her taxes.

Why shouldn't poker players?

It really isn't tough unless they are complete degens.

The last line is funny.

[SuuPRlim]

If you are staked/sold %'s then the person with the stake/% is liable for the tax, not the person who won the money;

For example if I had 10% of Peter Eastgate then when he was submitting his tax return he would require my personal tax information - as in LV I'm not liable to pay any tax on my winnings he would be able to send me my $900k and I would be able to keep it, if I was american I would have to pay a % of that to the IRS.

How it works with american->american (or tax country-> tax country) staking deals I'm not so sure, so if someone was in $250,000 make up and won $1m I guess they would have to show those previous $250,000 in loses to get tax relief on them.

You can claim back over the year but as far as I know you cannot claim back previous years losses, which makes it very unfair. Meaning if he was in $250k make-up and some of those losses were accrued in a previous year he might not get relief on them this year (but would have had on them last year I guess...)

@Ryan - yeh live cash guys have an advantage that it's easier to hide winnings - but this is only good to a certain point, as what use is $200,000 in cash if you've declared a taxable income of $44,000. You go and buy a car in cash for $40k and the IRS is all over you.  Also in Vegas the casino's record how much casino chips' you've cashed out and this info is available to the IRS also, so could be even worse, you could have $200,000 in bellagio chips and that's even less use if you're planning to hide it.

Not disputing that live cash players have an easier time with this but the advantage is fairly negligible and most will declare an amount much closer to the true figure than you would imagine. Making $300k in a year and saying you made $40k not really an option for most pro gamblers in the states.

I think that tax on gambling winnings is far too high, and far too rigid.  The argument of "well other people pay tax so why shouldn't gamblers do too" is fair enough but the way it's implemented means that the top earners get taxed way more than "real world" counterparts.

Ryan Reiss paid 42% of his main event win to the IRS, filed as a self employed gambler, do you honestly think a self employed person who made NET profit of £5,000,000 would have paid £2,100,000 in taxes? Absolutely no chance. So many ways and method of reducing your tax exposure legally that are not available to gamblers.  Also if you're going to be taxed on your profit then surely you should be able to claim back the tax you've already paid on the rake of entering the tournament?

Obviously the UK system of not taxing it at all is unfair in the reversal of this. Simply put though my view is that if a government is going to treat it as a self employed income and tax accordingly then the same amount of tax benefit should be allowed in return.

[tikay]

Good thread about the November Nine this, well excited for the final now.


ie. mods maybe split this thread in two? Pretty good discussion on tax n that, probably should name it as such.

!

Have asked the techy Mods to split the thread AFTER the fourth Post. Everything after that will be in a new thread, probably called.....

A taxing question

It'll not be until later this morning, the lazy tossers dont get up until 7am.

[tikay]

Points re UK

Sports betting pros actually pay negative tax as their winnings mean that less gross profits tax is paid by the bookie

All poker players pay tax via the gross profits tax.  Many poker players would win if it wasn't for rake.  It is an undeniable economic fact that in a competitive market, rake could be lowered if the tax was lowered.

Points re world as a whole

Some countries simply have vindictive tax regimes where gambling is concerned.  They want to punish winners (and often losers).  They don't deserve any loyalty whatsoever and criticising refugees from persecution of this kind isn't fair.

While I agree with you that several countries do indeed have a overly harsh tax rate levied on poker players the players know this when they chose to play.

Tax dodging is completely unacceptable.

You live in a country, you should pay the tax.

Don't wait until the tax impinges on you negatively then move to a different country.

Why not that's what 99% of company's do.

You reckon I think that is acceptable behaviour?

It isn't tax dodging.

If the country in question banned gambling by any of its citizens, would you consider it reasonable for them to move to continue gambling?  A tax regime that makes it virtually impossible to gamble is effectively a ban.

It is perfectly reasonable to have a discussion about tax and who should pay what.  But when gamblers are excessively taxed just because some bureaucrats know they are an easy mark and the public won't stand up for them, that is oppressive and it is perfectly reasonable to protect yourself from that.

I may be naive, but I honestly don't think most governments overly tax gamblers because they are trying to screw that sector hard.

I just don't think they understand the industry.
For example I see from Oct 1st Pokerstars aren't allowing UK players to auto rebuy or top up in cash games or tournaments.

That's beyond silly.

Couple of points on that.

That is not something that is being implemented for any tax-related reasons, it is coming in (rightly or wrongly) for completely different reasons.

It is not just PokerStars UK, it is ALL sites that wish & need to comply with the new UK gaming Licences. As it happens, not all of them will introduce this on Oct 1st, as it is being appealed. I would expect that if it is implemented, most sites will do so by January 2015.

[dwayne110]

Re the 'offsetting losses' points, if this ever came into play I think it would clearly be on the basis the losses can only be offset against future profits from 'the same trade', i.e.  poker winnings.
The idea of a self employed IT consultant with an expensive poker habit offsetting year on year losses against his IT income Is bonkers.

[AlunB]

Re the 'offsetting losses' points, if this ever came into play I think it would clearly be on the basis the losses can only be offset against future profits from 'the same trade', i.e.  poker winnings.
The idea of a self employed IT consultant with an expensive poker habit offsetting year on year losses against his IT income Is bonkers.

But think how good it would be for the games?!

[AlunB]

Good thread about the November Nine this, well excited for the final now.

ie. mods maybe split this thread in two? Pretty good discussion on tax n that, probably should name it as such.

I find it hard to give a shit about the nov 9 to be honest

[pleno1]

Should we have a thread about taxi on the forum at this time?

[tikay]

Should we have a thread about taxi on the forum at this time?

Not sure what you mean, Mr L. Have I been whooshed by the BITB?