Poker Pro In Tax Battle With Canadian Authorities
2010 World Series of Poker Main Event winner Jonathan Duhamel reportedly owes the Canadian federal government an amount of CA$1,2,114 in back-taxes from money earned playing professional Poker during the period 2010-2012. What’s more, should Duhamel fail to back up his defence, being that his income for the assessed period had been generated from games of chance, he will most likely be held liable also for outstanding state taxes payable to Quebec – bringing the total in outstanding back-taxes payable for the period in question to about CA$2.4 million.
The issue is obviously whether or not, from a legal perspective, Duhamel’s winnings were generated within the scope of taxable professional employment. The Canada Revenue Agency (CRA) announced late last year that Canadian Poker players earning their main source of income from playing Poker, and from playing Poker for a specified number of hours (and over) every week, are indeed liable to pay taxes as would any other professional worker. These players are playing the game as a business, said the CRA at the time, and are therefore not covered by Canadian tax exceptions covering money earned from “games of chance”.
Duhamel’s matter has been set down for hearing by the Tax Court of Canada in March next year.
To Tax Or Not To Tax
Interesting to note is that the bulk of those winnings making up the local tax dispute were in fact won in the U.S. This is where the 2010 WSOP Main Event that saw the Canadian win US$8,944,310 in first place prize money had been played. Duhamel, only 23 years old at the time, during that event defeated John Racener heads-up – becoming the first Canadian player to win a Main Event bracelet in the history of the WSOP.
In the United States, all money won from playing Poker is taxable. Those declaring Poker a formal profession are however taxed at a lower rate than those declaring their winnings to have been generated from playing a game of chance. Duhamel had reportedly paid to U.S. tax authorities the required amount payable according to the rate imposed on those declaring Poker to be a game of chance. This will however in all likelihood be considered by a local court to have been a move made in purposeful avoidance of dual taxation – instead of an actual concession.
“Pro” A Marketing Gimmick
Duhamel, in the meantime, claims he wasn’t working at a profession at the time of his big WSOP win, and that to him, since he’s never received any formal training, Poker remains a game of chance. He also argues that his former inclusion in Team PokerStars Pro had been a mere marketing gimmick – and not in any way indicative of his having played Poker for a living.