After losing to ex-champ Jonathan Duhamel last year, Revenue Canada had better luck once morest two other poker players, who may have to pay tax on some of their winnings.
Less well known than Mr. Duhamel, Antoine Bérubé and Philippe D’Auteuil earned at least $3.2 million and $5.1 million, respectively, playing online poker from 2008 to 2011.
In Canada, gambling winnings aren’t taxable unless the person pocketing them behaves like “serious” business people do, the Tax Court said in rulings last week.
In court, Mr. Bérubé and D’Auteuil testified that they sought “above all the competition, the adrenaline, the “thrill“” by playing poker and that their behavior was “risky, reckless and irrational”, summed up Judge Réal Favreau.
Photo from playgroundpoker.ca
Former poker player Antoine Bérubé might have to pay $850,0000 in taxes in Ottawa and Quebec City if recent decisions by the Tax Court of Canada are upheld.
Addiction as a Defense
They further maintained that they did nothing specific to minimize their risk-taking and regularly gambled under the influence of alcohol or drugs.
According to them, the fact that they devoted themselves almost exclusively to poker from 2008 to 2011 and that they did not hold a job allowing them to live did not mean that they operated a business.
very active
During these four years, Antoine Bérubé and Philippe D’Auteuil played poker 255 to 330 days a year, often several hours a day and on several tables at the same time.
The tax authorities also noted that the two players used the Holdem Manager software, which notably allows users to keep their personal statistics and to obtain information on their opponents.
MM. Both Bérubé and D’Auteuil were able to acquire real estate by paying cash, the magistrate noted in his rulings.
Despite their “non-standard way of life”, the two players had “a behavior of serious businessmen”, ruled Judge Favreau.
They were aiming for profit
“On a balance of probabilities [ils avaient] the subjective intention to make a profit by engaging in [leurs] poker activities” and used their skills “to win [leur] life in poker, a game of chance where skill is a big factor,” he added.
The lawyer for the two men, Danny Galarneau, indicated yesterday to the Journal that he was going to appeal both judgments. Me Galarneau has already appealed another decision rendered by the same judge last fall once morest another millionaire player, Martin Fournier-Giguère.
If the decision stands, Mr. Bérubé and D’Auteuil can expect to pay approximately $850,000 and $2 million, respectively, in taxes in Ottawa and Quebec (part of their winnings are not taxable due to deductions).
THE TAX FACING THE POKER MILLIONAIRES
- Jonathan Duhamel
Gains in dispute: 5,4 M$ (2010 to 2012)
Result: player wins - Martin Fournier-Giguere
Gains in dispute: 1,7 M$ (2008 to 2012)
Result: tax victory - Antoine Berube
Gains in dispute: 3,2 M$ (2008 to 2011)
Result: tax victory - Philippe D’Auteuil
Gains in dispute: 5,1 M$ (2008 to 2011)
Result: tax victory
