The key take-away is that poker losses are now deductible for professional gamblers beyond your profits, so you can carry them forward and backward to offset income in other years. You can file on Schedule C instead of Schedule A, which limits deductibility.

Of course, none of you probably have any losses to deduct, but it’s nice to know that you have the right anyway.

Wow. You know taxes and finance aren’t really my game, but if David’s correct, this reversal of interpretation seems nearly as big as the DOJ’s December flip on the Wire Act — microeconomic change poker players can believe in!? Even if my attachment of significance is a bit of a stretch, it probably was about time for the Feds to acknowledge that yes, they know now (after years of investigation), playing poker even semi-professionally comes with legitimate business expenses beyond your buy-in …but bummer for Dan personally, as losses suffered in the Pokerati game apparently are not deductible as marketing write-offs. (Crap, there goes my equity.)

Kinda a big step for poker players seeking a certain legitimacy for their profession. And who knew … “Tax Court,” it turns out, is a real place, not some reality show on Bravo or The Learning Channel.

A quick-and-dirty excerpt from the new issue of the (always-sexy) Journal of Accountancy that jumps right to the end for stuff that matters for poker players who at least occasionally find themselves reporting net-positive results is below:

CONCLUSION

Under the holding in Mayo and the IRS’ acquiescence to it, professional gamblers are allowed to fully deduct their nonwagering business expenses beyond wagering gains. Nonwagering business expenses may include transportation, meals and entertainment, admission, subscriptions and other fees. In addition, if nonwagering expenses exceed wagering gains and other income, they may give rise to a net operating loss that may be carried back to previous-year returns or carried forward to future-year returns. Professional gamblers still must substantiate the amount and the business purpose of the expenses to secure their deductibility (Presley, T.C. Memo. 1979-339).

EXECUTIVE SUMMARY

The IRS acquiesced to the Tax Court’s recent holding that a professional gambler in the trade or business of gambling could deduct nonwagering expenses in excess of gambling winnings under Sec. 162(a).

Historically, such costs in excess of gambling winnings have been disallowed under Sec. 165(d) and previous Tax Court precedent. Now, however, such deductions may offset other income and even result in a net operating loss that may be carried back or forward to other tax years.

To be considered a professional gambler, taxpayers generally must demonstrate to the satisfaction of the IRS that they are engaged in gambling as a trade or business rather than casually. The IRS and courts apply nine factors in regulations under Sec. 183, as well as all relevant facts and circumstances, in making the determination.

Nonwagering business expenses may include transportation, meals and entertainment, admission, subscriptions and other fees. Wagering gains include wagering winnings and “comps” (the fair market value of complimentary goods and services) but not additional income to casino personnel in the form of “take-offs” and “tokes,” which are likely to be considered compensation or other, nonwagering income.

Telling our elected representatives that we want them to support online poker does more than simply push Congress to move legislation. While that is a great thing in and of itself, grassroots advocacy also helps PPA’s lobbyists on the Hill to advocate for player-friendly provisions. These include issues that impact the rake, tax fairness, the number of states participating, and plenty of other issues of importance to us – the players.

As an online limit hold’em player, one big issue I have seen personally is in the rake (the amount of each pot sites retain for providing the service). While rake may seem small on a per-hand basis at first glance, it adds up quickly for pros as well as for recreational players. Congress will not set a low rake legislatively via price controls, but they do have control over the level of competition in the marketplace. PPA is actively lobbying to maximize participation in the online market, thus ensuring healthy competition in rake and promotions.

PPA is also actively fighting for income tax fairness for players who file taxes as amateurs. This issue can be addressed either in the initial legislation or – more likely – in a subsequent bill. Either way, we all have to do our part now to lay the groundwork for that important effort.

Another issue is in state opt-outs. Congress will not force unwilling states to participate in online poker and will include a mechanism for states to opt out of any poker bill. Under some proposals, states will have to tell the federal government that they will not allow their residents to participate (if they say nothing, they are in). Under others, states will have to tell the federal government that their residents can participate to be in (if they say nothing, they are out). Yet other proposals provide for various hybrid approaches based on types of gaming currently permitted in each state. These approaches would result in different numbers of states allowing their residents to play on the new licensed poker sites. PPA is lobbying for provisions that would provide for maximum participation.

To succeed here and in the overall fight for legislation, it is important that we all do our part to advocate for the game. Will you do your part? Many groups are lobbying for online poker. Only PPA is lobbying for online poker players.

PC World’s very favorable review of the poker community’s social networking activism compared our efforts to Arab Spring and other world events of great significance. The efforts of the poker community are having a real impact. Let’s keep it up!

OK, before I over-insinuate: some news-you-can-use for poker players looking to play it straight with the Feds:

Attorney Brad Polizzano (aka @taxdood) has a series on PokerFuse about various tax matters pertinent to poker players — such as rakeback, staking agreements, and Form 8-Ben Lamb, I think it’s called?

And Theresa Fox (@TfoxCPAinc) talks taxable income on Strategy with Kristy n — tackling matters for anyone with gambling winnings in play, especially those that may have transpired in some capacity across international borders:

Hi Dan,

Jake and I will be in Vegas the week of June 13. A buddy of his will be staking him in event #26. Do you have access to any kind of staking agreement we could prepare prior to the event? Thanks.

Chuck

Hey Chuck! I’m not Dan, but I am Dan-ielle so … close enough!

There are no set-in-stone guidelines for backing players but the most common practice is a 50/50 split of winnings, after the backer has been paid back on his investment. (i.e. the buy-in.) The second most common is for the backer to get his investment back and 60 percent of the remaining winnings, with the player keeping what’s leftover after that.

Backing deals can get more complex depending on if the player is responsible for paying back all or some of the money if he doesn’t cash. Usually deals that require no make up from a player would have a higher percentage going to the backer, usually 70/30 or even 80/20.

Here’s a video I found — Mike Frazin – Backing Poker Players and the Rules — explaining “make up” a little more.

Ethics play a large part in making these deals, so Jake and his backer should know each other well or both already have a trustworthy reputation before agreeing. It would be a good idea to use a lawyer to draw up a contract but if they just want to keep it simple, just make sure that each party understands the terms and writes them out, clear as day, for both parties to sign or have notarized. You may also want to be sure you both are clear about the breakdown for tips and taxes.

Hope that helps and tell Jake I said, “Good luck!”

There are two actions pending against online poker companies in the Southern District of New York — an indictment of individual defendants, and a civil forfeiture complaint against the companies. The civil forfeiture complaint seeks forfeiture of all assets of the defendants, including specified domains and bank accounts.

There have been several civil and criminal forfeiture cases brought by the DoJ in recent years, including Daniel Tzvetkoff’s and Douglas Rennick’s (which are the original and first superseding indictments in the current case). Similar forfeiture cases have also been brought against other payment processors, but in none of these cases, as far as I know, have the Poker companies filed claims objecting to the seizures. Also of note is that no players made claims either.

Any player who makes a claim [for their deposits] should expect criminal inquiry by the FBI and IRS, and would not be able to recover on provable claims for some time. If the Poker companies default on the civil forfeiture, players will have no real legal recovery.

For the purpose of filing Foreign Bank Account Reports, some players may have taken the position, consistent with the position of the IRS, that they are general unsecured creditors in a common pool fund of deposits, and as such have no control or discretion over the investment of the funds. If this position is correct, then the DoJ’s forfeiture claims may have legs, as there may be no players to come forward able to make the specific factual statements necessary for a bonafide claim. Further, in order for the Poker companies to make claims, they likely would have to submit to jurisdiction of the U.S. and open their books and records to the DoJ and IRS among others.

Players who think they can write off their funds on deposit for tax purposes, and thereby get some benefit by tax losses, may run into the problem that IRC §165 limits gambling losses to gambling winnings (plus travel and related expenses for professional gamblers). But that means the winnings must have been reported and will require proof of deposits made. For some players, proof of deposit may be problematic.

Any player who makes a claim should expect to face full disclosure requirements on inquiry by the FBI and IRS (likely Criminal Investigation Division) and would not be able to recover on provable claims for some time, and at a non-trivial expense. For among other things, for players to prevail, they will need to get cooperation from the Poker companies and produce “competent evidence”.

If there is a possibility that the Poker companies default on the civil forfeiture, the players will have no real legal recovery.

Just my observations.

ALABAMA — A small little gambling fight is going down in the land Spencer Bachus represents, over a matter of semantics, technology, and the millions of dollars bingo machines represent. Bingo is legal in ‘bama … but should video bingo be? The fight is a dirty — complete with one agency repeatedly trying to raid a well-monied operation that believes it’s on the right side of the law.

CHINA — After a slow start, gambling revenues in Macau are reaching record levels.

IOWA — The Iowa Racing and Gaming Commission’s computer system got hacked, and they’re blaming China:

Chinese foreign ministry officials strongly disputed the report, issuing a statement calling it “full of bias and ulterior motives.”

Personal information in the breach included names, Social Security numbers, home addresses and dates of birth. Most of the people in the licensing database are Iowa residents, but it also includes residents of Illinois, Minnesota, Nebraska, South Dakota, Wisconsin and other states, Ketterer said.

The list includes workers such as card dealers, slot machine technicians, jockeys, trainers and owners of horses and greyhounds.

LOUISIANA — The New Orleans-to-Shreveport casino-biz is in a definite recession, one not planned for when the state planned on becoming the central-coast alternative to Las Vegas and Atlantic City. They blame Texans for not gambling enough Oklahoma and Mississippi for cutting in on their action.

NEW JERSEY — Big fight going on over laws related to the building of Revel — the east coast’s $2.5 billion version of CityCenter. Should be an interesting development to watch go up (or down) as New Jersey fights to stay competitive with the smaller casino operations set to open shop in Delaware and Pennsylvania, but not Maryland.

MARYLAND — Gov. Martin O’Malley is saying Maryland’s not gonna jump into the gambling expansion fray, despite assertions that his state is gonna lose out as neighboring locales up their casino offerings to include table games + poker.

OHIO — As we know, Lyle Berman has effectively bought himself a piece of all the newly legalized action to come in Cincinatti, Cleveland, and Toledo. But he’s run into some blowback over the location of a new casino in Columbus. The constitutional amendment voters approved in November called for a full-blown casino-resort downtown, but now a referendum on a May ballot will decide if the Penn Gaming development should be moved to a blighted part of the city.

Related: “It’s Lyle’s Ohio Now”

UNITED KINGDOM — Once upon a time, Great Britain was leading the world in all things online gambling. But regulations and tax issues are messing that up — and it’s turning into a battle of Labour vs. the Tories for the UK’s gambling future. Good rundown on some British gambling-law history and where the different parties stand on gambling in the UK … as the rest of Europe catches up.

At issue is the inclusion of table games — blackjack and poker specifically — in Pennsylvania “slot machine parlors”. Doing so would bring in $242 million … and yesterday’s overtime debate revolved around 170 amendments to the bill.

It’s definitely not all about poker though, or gambling for that matter … Pennsylvania apparently has been at a legislative impasse and operating without a state budget for 97 days!

It does seem, however, that the expanded gambling measure could make or break the budget as a whole.

But opposition isn’t just from the usual hate-gambling suspects … others think the tax they are trying to impose on future card rooms is simply too high:

The legislation would levy a 34 percent state tax, a 1 percent host-county tax and a one-time licensing fee on casinos that choose to offer table games. The fee would range from $7.5 million for resort casinos, which could have up to 75 game tables each, to $20 million for stand-alone casinos, which could have as many as 200.

[...]

“Gambling has proven to be a real nice revenue source for Pennsylvania … but it’s not quite the money tree that you all might think it is,” said Rep. John Pallone, D-New Kensington. “It’s a business like any other business, and we can’t overly tax it so bad that gaming will leave the commonwealth and then we’ll have nothing.”

Nearby Atlantic City sees it a bit differently, fearing that if this measure goes through, it will be a huge hit on their economy.

More from a Pennsylvania politics blogger inside the Harrisburg capitol here.

A final vote could come as early as tomorrow, you know, if the debate suddenly gets all efficient and shit.

And even if the bill does get through the House, some are saying it faces likely rejection in the Senate (which is what all the negotiating/bickering/compromise going on now is all about).

There are lots of amateur poker leagues out there, and with all due respect, we don’t pay as much attention to them as we used to unless there’s allegations of grift and/or a plot to kill the guy running it with snakes. However, the Lodge Amateur Poker League has always been near and dear to Pokerati’s heart.

Back in the early boom days, All In magazine called it “The best amateur tournament in America!” Ahh, we were having some good after-church strip-club times every Sunday, with more and more players getting better each week … in pursuit of not just gift certificates and lap-dance coupons, but also, and believe it or not more important than seeing boobs for most, a seat in a $1,500 WSOP event (travel expenses included, of course).

But like so much in poker, after Dan left it eventually lost its way. The tournament carried on, but allegations of chip dumping and cheating (yes, in an amateur tourney) made it lose its luster. Then came the Texas sin tax that made this “free” tournament a $0+5 NLH — with that whole $5 going to the State — and field sizes continued to dwindle.

Courts have since ruled that tax unconstitutional, so the game is free again … and now the Lodge — named Best Strip Club in America at the 2008 Exotic Dancer Awards in Las Vegas, btw — has renewed its commitment to making its weekly amateur poker tournament not just the best in Texas, but tops anywhere. The new TD cracking the poker whip: Sharron Nix.

Very cool. She knows her stuff, and knows how to have a good time. I’ll have to make a trip back to Dallas to check it out … and I hope it becomes a regular stop for poker people passing through. I don’t know the details about prizes or anything yet, but I’m sure she’ll run a great event.

Now the details:

Beginning this Sunday, The Lodge will open at NOON with a full slate of NFL football on our gazillion big-screen TVs. Our great lunch specials go on till 4 p.m., and it’s Happy Hour all day and night.

Our new, improved, fabulous and free PRIMO POKER debuts this Sunday at 4 p.m. Our Poker Princess, Sharron Nix, will offer free Texas Hold’em lessons at 3 before the cards drop at 4. Highlights include great weekly prizes, season prizes of buy-ins at big-time tournaments, terrific food and drink specials, and beautiful dealers at every table. Plus, you’re at The Lodge.
See you Sunday!

Costa Rica plans to officially introduce a bill this week that has been brewing for a few months to tax and regulate the many online gambling entities with operations there. The assertion is that a 2 percent tax would generate $100 million in revenue. There also was talk of a 1 percent tax on the end users, though it’s not clear if that provision is included in the legislation.

(Does anyone notice how much faster bills seem to move through Congress in Latin American countries?)

An estimated 300-some online gambling purveyors make at least one home in Costa Rica, though some might consider moves to Panama should the new tax pass. Several, such as Bodog, have already moved to Antigua, the UK, and elsewhere.

From AM Costa Rica:

Finance ministry will seek to tax virtual casinos in new bill
By the A.M. Costa Rica staff

The financial ministry is about to present to the legislature a bill to regulate virtual casino operations located in the country. Ministry officials said they hoped to get up to $100 million a year in new taxes.

The disclosure came from Jenny Phillips, the minister of Hacienda in the Comisión de Control del Ingreso y el Gasto Público. The minster pointed out that the virtual casinos are unregulated now. She did not amplify what the bill would contain nor was the scope of the types of gambling to be covered outlined.

The minister said that the bill is part of a campaign against tax fraud and reforms so that the country can take in more taxes. Virtual casinos and online gambling operations are all over Costa Rica. This country and Antigua are the two places with the highest concentration of virtual gambling, the minster said.

There was no indication what provisions would be made to keep the virtual operations, which are highly transportable, from going elsewhere if taxes are levied. Although the operations themselves are not taxed, such businesses employ many local individuals who contribute to the general economy.

More details here, too.

The intent would be to raise capital in preparation for all sorts of crazy consolidation and forthcoming acquisitions in the online gambling sector.

At least one Betfair exec dismisses the talk as little more than speculation, despite meetings with Credit Suisse and other banking advisors that have the European financial press getting their knickers in a bunch as “companies seek to position themselves to enter the world’s biggest gambling market.” Should the rumored floatation happen, it would be the first major listing on the London Stock Exchange since the global economic collapse.

$400k HORSE

At the same time, Betfair last week made another move toward American soil by pledging $400,000 to the New York (Horse) Racing Association as an overlay should two specific horses face off against each other in October at Belmont Park:

Rachel Alexandra, the first filly to win the second leg of horse racing’s Triple Crown since 1924, has won her last eight races. Zenyatta is undefeated in 12 career starts, including the 2008 Breeders’ Cup Ladies Classic.

LOL, I didn’t even realize they had ladies events in horse racing!

Across the Chunnel: Refashioning French Poker

Arnault.

Betfair also just got themselves approved to enter France’s online gambling market, which is set to open next year … apparently with some nice poker-friendly alterations to the rake. (The new French law originally had players paying tax on every bet and raise, on every street … which can totally screw with your pot-odds calculations!) Helping get Betfair to the front of the French licensing line, with a better rake structure no less? Heavy lobbying efforts from billionaire bling merchant Bernard Arnault, CEO of Louis Vuitton, 10 percent owner of Betfair, and the 15th richest person in the world.

New-and-improved Yahoo! Poker Coming Soon

We’re talking Yahoo! Uk & Ireland, of course, not Yahoo! USA. The British arm of the web behemoth just re-upped its partnership with GTech G2, for two years, to provide real-money gaming options — and part of that deal includes plans to unveil a fully downloadable real-money Yahoo! poker room, not just the (lame) in-browser version currently available.

Magazine Moguls Jump into Mobile Gambling

PartyGaming CEO Jim Ryan recently said that the biggest threat to established online gaming brands comes from major media outlets, not current competitors. And sure enough … Dennis Publishing — the mega-magazine company behind Maxim, MacUser, Computer Shopper, Bizarre, Men’s Fitness, and more than a dozen other publications (including PokerPlayer, Inside Poker Business, and Stacked) — just launched its Monkey Mobile Casino, offering real-money online gambling on handheld devices. (The current issue of Monkey, fwiw, features a picture of Lady Gaga’s recent nipple slip.

The Swedish Taxman Cometh

Meanwhile, the Swedish Tax Authority (Skatteverket) has been studying all forms of internet commerce tax evasion since 2007, and has concluded that online poker companies with offshore servers are one of their biggest sources of uncollected e-commerce taxes.

Amy Calistri always has eyes on the stock market and the corporate goings-on of poker-related businesses, and her latest take on the sale of the WPT assets is right on the money. She gives the latest about stockholder rage over the WPT/Gamynia move and puts into words what I’ve been thinking for years, since shortly after I left the WPT fold and began to notice its downfall. That’s not to say it can’t rise again, but it might need new leadership to make that happen. An excerpt:

Frustration and envy appear to be the seeds of the series of missteps that sapped millions of dollars and focus away from the company’s core business. While the WPT helped create the poker boom, its television production business model only got a small piece of the obscene profits that were being generated by poker’s popularity. Online poker companies and online media sites reaped the lion’s share. This infuriated the WPT; they felt they were owed.

Gambling law professor I. Nelson Rose can break down a legal document or political issue like nobody’s business, and it’s a good thing he took the time to analyze the Menendez bill introduced to the Senate this week. Thanks to Poker Grump, this piece takes a look at the 91-page document and sheds some light on the proposed participation of states in the regulation/licensing of online poker, the tax on deposits to online sites, and the possible exemption of sites like PartyPoker from licensing. A sampling from the article:

Taxes might be a problem. The Frank bills have no limit on what taxes states can impose on operators, but limit the federal government to what is called a fee of 2% on deposits. Menendez is asking for less and more: A Federal Internet gaming license fee of 5% of deposited funds and a State or Indian tribal government gaming license fee of another 5%. This does get over the big problem with the Frank bills, that the big states, like California, where the customers will be, have no incentive to support Internet gambling operated and taxed by Nevada. Under Menendez, California gets that 5% tax. Although the states won’t like this provision: Tribes are treated like states, so if a player is on Indian land, that tribe gets the full 5% and the state in which the tribe is located gets nothing.

Of course, the tax system is still screwy, since it is a tax on deposits, not revenue. But it might work.

Brilliant, I know.

And actually, not even billions … just $10,000 or more. Apparently a new IRS rule has gone into effect that requires online poker players to treat their online accounts — PokerStars, Full Tilt, et al. — as offshore foreign bank accounts.

Yeow, that’s different. Sources who were winning players online tell me nothing more than a WG-2 was necessary before. Again, I’m not really sure what that means (or what enforcement mechanisms are in place) but do I know this change theoretically affects lots and lots of people and probably at least a few billion dollars. If I’m reading this tax expert right, basically, if all your money in all your accounts added up to $10,000 or more at any point in 2008, you have to file a special form (TD F 90-22.1, which goes to the Dept. of the Treasury, not the IRS) for these accounts, and the fine for not doing so is either $100,000 or half your bankroll, whichever is greater.

That sounds pretty tough. But maybe this is just what comes with the territory as G-men set up a framework for how these online piggy banks, er, poker sites have to work in the future? No word yet on whether or not you’ll ever be able to pay your taxes in PokerStars W$/T$ or Lindens.

Here is the article in full:

The New Deal: Regulate and Tax iPoker
By Alfonse D’Amato
Special to Roll Call
January 27, 2009, 4:21 p.m.

As the Obama administration and the new Congress evaluate their policy priorities, they cannot ignore the significant challenge to fund these programs given our nation’s financial situation. Our new leaders have been dealt a struggling economy, and even President Barack Obama can agree that tax increases to pay for his agenda won’t reveal the winning hand, politically or practically. A possible solution, however, is not out of reach. Our new president needs only to look at his favored form of skillful avocation: poker.

Yes, I said poker. While business leaders and politicians debate how much, or how little, we should regulate the business community, the online poker industry and the millions of Americans who play on the Internet have been crying out for regulation and taxation. The absence of government regulation, and in fact the quixotic efforts to ban Internet poker, has left U.S. consumers vulnerable and left billions in potential tax revenue on the virtual poker table.

Regulation of Internet poker does not equal an expansion of gambling in this country. Like it or not, that genie is already out of the bottle. The American market has spoken. There is strong demand for Internet poker and no reasonable government can or should stand in the way of adults competing in games of skill on the Internet. To the contrary, the government should step up and exercise control over the multibillion-dollar activity and respect the rights of the estimated 15 million Americans (and 100 million globally) who play and collect the revenue. This is not a new tax. It’s not politically risky tax increases. Regulation simply allows for the collection of taxes that are currently going overseas to the other countries that have already seized on the global poker phenomenon.

This idea is not lost on the American public, who made their preference known through Obama’s Citizen’s Briefing Book Web site. Regulated Internet poker was consistently in the top 10 of the most popular proposals the American people want Obama to enact while in office, and it received the most user comments by far.

The poker potential has not gone unnoticed on Capitol Hill. In the 110th Congress, several pieces of legislation were proposed that would implement regulation and licensing of Internet poker. Unfortunately, none were given full consideration, mainly because of a push by staunch anti-gambling interests who believe an outright ban of online poker is the only option. As conservative columnist George Will aptly pointed out, laws that attempt to block Internet poker are “Prohibition 2.0,” and, as Mr. Will explains, history has shown that prohibitions do not work. Rather, they exacerbate and even create problems, especially among vulnerable communities, by driving the prohibited activity underground where unscrupulous operators can easily, and without fear of prosecution, take advantage of consumers for their own gain.

While the U.S. has been asleep at the wheel, other countries have stepped up to protect their citizens, and by default ours. The vast majority of poker Web sites are highly regulated in their home jurisdictions, such as the United Kingdom, Isle of Man and Alderney. These countries’ credible regulatory regimes are complemented by sophisticated technologies, verified by independent network and software security companies that help the sites detect fraud, prevent underage access and even provide services for problem gamblers. These sites welcome the additional oversight U.S. regulation will bring to the industry.

Obama is purported to be a skillful poker player, an expertise that should be an unwritten job requirement for all would-be U.S. presidents. Poker teaches you patience, and it trains you to calculate the odds and avoid unnecessary risks. If Obama applies his poker skills to his job in the White House, he will reject politically unpopular and economically untenable tax increases and look seriously at other potential revenue streams like Internet poker.

No matter how you cut the deck, regulation is the answer.

Some key ideas from the day’s speakers:

• “If your only goal is to win pots, you can play and bet every hand, win some of them, and become the world champion of winning pots. But if your object is to make the right decisions, you can be a champion poker player.” – Mike Caro
• George Epstein gives speeches and poker lessons to seniors to sharpen their minds, leading to better overall health and quality of life.
• Lou Krieger gave top-notch poker tips. There’s a reason he has authored 11 poker books.
• Stan Sludikoff, long-time publisher of Poker Player Newspaper, has been speaking to Lyle Berman about a poker television channel. Plans are still being formulated but he insists that it will happen.
• Marsha Waggoner gave the best quote from Vince Lombardi: “Show me a good loser, and I’ll show you a loser.”
• Russell Fox is an expert on taxes as they relate to poker players – amateurs and professionals. He knows his laws and seems to be the tax pro to the poker biz.
• John Pappas is extremely dedicated to the PPA. As Executive Director for only a few months, he has recruited numerous members of Congress to sponsor pro-poker legislation. And he bought me lunch.

Mike Caro was the keynote speaker and introduced each guest throughout the day. The most interesting thing was that during his wife’s initial welcome words, Mike went around the entire room to quietly meet and shake hands with each and every person at the conference. Quite the nice touch. And he has quite the dry but keen sense of humor.

George Epstein, an 81-year old poker enthusiast, provided some interesting anecdotes about poker. The guy actually gives speeches to groups of senior citizens and teaches them poker because he believes it stimulates the mind, helps memory, and leads to healthier living. A meeting with a group of early Alzheimer patients is next on his agenda. He also discussed a very interesting 1870 court case in which the members of the jury were deciding if card games were skill-based or gambling, so the evenly-divided members of the jury were ordered to play cards by the judge. The members who believed card games were skill-based took so much money from the deacons on the other side that the judge ruled it was a game of skill.

Lou Krieger and Susie Isaacs perhaps gave the best actual poker tips and advice. With so much experience behind each of them, they were able to break down some important and oft-neglected points. Vince Burgio talked about the life of a poker pro, and Marsha Waggoner’s speech centered around staying positive and focusing on winning. And Robert Turner kept the post-lunch crowd interested with some tournament game selection advice.

Stan Sludikoff not only discussed the TV poker channel that he is in the process of developing, along with the help of Lyle Berman, but he also mentioned that Poker Player Newspaper will celebrate its 25th anniversary this November. All archived issues of the publication, going back to its first issues, will be available online soon. In addition, there is a new poker website coming soon – Poker Player Newspaper will market it – that involves no rake. Lots of good ideas coming from one of poker old-timers.

Russell Fox seems to be the resident tax expert to numerous poker players, and he certainly knows of what he speaks. Here are only a few of the interesting facts he doled out:
1. Amateur players can only deduct expenses that are absolutely necessary to their play, such as bank fees to make a bank withdrawal at a casino ATM. Very few other expenses are allowed.
2. Professional poker players can deduct anything necessary and ordinary – very inclusive of many daily expenses.
3. Online poker players must keep records, but a detailed Excel spreadsheet is acceptable.
4. Live poker players must keep handwritten records of each and every minute of play.
5. Keep tax records and receipts for six years.

John Pappas has quite a bit of experience in politics, and his passion for it – along with a passion for the poker cause – shows in only the first few minutes of conversation with him. He is very excited about the first Washington D.C. Fly-In that takes place this week. Members of the PPA who attend will be taught the finer points of lobbying by Pappas and Alfonse D’Amato, and meetings are already scheduled for attendees to meet with members of Congress. The PPA is also preparing to launch a voter registration campaign in 2008.

Day 2 will feature Jeffrey Pollack talking about the 2008 WSOP, Jeff Sandman explaining the Safe & Secure Internet Gambling Initiative, and numerous pros giving poker tips and hosting several discussion panels.

CardPlayer: “Tax Law Stopped”
PokerListings: “Tax Code Clarified”
4Flush: “Still Being Worked on”
PokerNews: “Tax Proposal Nixed”
I. Nelson Rose: “IRS Has Changed the Law”