Posts Tagged ‘taxes’

Intrastate of War?

by , Mar 12, 2013 | 7:20 am

From for the week of March 11th …


#1. PokerStars and the AGA  threw first punches last week in what could develop into an extended and mutually bruising battle. Are they interested in cooling down, or escalating further? This week should provide some clues. Also: It turns out PokerStars’ NJ application could drag out well into summer.

#2. IL and PA could both take legislative steps toward regulation. PA State Rep Tina Davis “might” introduce her bill mid-week (20% gross tax, no compacts, licenses to existing operators only). As for IL, look for clarification on the next step for online gambling after a planned Senate vote on the combined live/online gambling expansion bill was scuttled late last week. Seems like some IL Dems didn’t like what they saw?

#3. New Jersey was supposed to finish up a first draft of online gambling regulations last week. No word on what shape they’re taking, but with the pace to date I would expect more details – and more launch projections – as we move into the middle of March.



I offered my quick take on the Illinois gambling bill . And on the timing of the AGA’s petition to bar PokerStars from NJ, which I also discussed on last week’s TwoPlusTwo Pokercast.


@Follow – It’s tax time, and U.S. poker players with questions would do well to follow both @QuantPoker and@taxdood.

#GoodRead –  …and to check out their respective blogs: and

Are China’s Whales Fleeing Macau for Vegas?

by , Aug 2, 2012 | 12:53 pm

Maybe Southwest Airlines can loan Macau its Shamu fleet.

The Macau situation we reported on last month is getting worse. Macau gaming revenues grew only 1.5% in June, the slowest growth rate in three years, according to this Las Vegas Review-Journal article. And based on data from both the Wynn and Las Vegas Sands, more of China’s whales appear to be flying to Vegas to gamble.

In its latest Securities and Exchange Commission filing, 75.6% of all wagers on Las Vegas Sands’ Vegas table games were made on credit issued to whales. This is the highest whale credit number reported by LVS in at least eight years. It’s five percentage points higher than 2011 and up more than ten percentage points over 2010’s credit numbers.

Meanwhile, LVS’ whale credit in Macau has been shrinking. In the last quarter only 31.2% of table game wagers were made on credit, down from the 36.9% average in 2010.

In its most recent quarterly filing, Wynn reported that 82% of its table game markers were issued to non-US citizens, primarily from Asia. That’s seven percentage points higher than the same quarter last year.

The casinos benefit when whales chose Vegas over Macau. For one thing, the gaming tax in Macau is 12% versus Nevada’s 6.75% gaming tax. But there is another tax advantage. If the whales default on their markers in Vegas, the casino companies don’t have to pay taxes on the gaming revenues generated by those markers. In Macau, they do.

It may also be an advantage for China’s whales to play in Vegas. Macau junket operators, a primary source of whale funding, break legs are known to be more vigilant about collecting on bad loans.

The only real losers in the Chinese whale migration may be Nevada tax payers who, in effect, subsidize bad whale credit.

Infograffiti: What Online Gambling can Do to Solve US Debt Woes

by , Jul 8, 2012 | 12:34 am

Everyone loves a good infographic even if its hardly been fact-checked … and this one (with lots of pretty colors) from the presumably good folks at (via Fox Business) breaks down some numbers that say to lawmakers, hey, if your state isn’t looking to online gambling to alleviate debt troubles, then why not? (Don’t you care about the kids and school?)


How a Tennis Star Could “Let” PokerStars into Spain

by , May 30, 2012 | 10:24 pm

Nadal, accepting 2008 Olympic gold medal, wrapped in Spain's flag

Nearly every poker player knows that May 27 kicked of the 2012 World Series of Poker. It was also the first day of Tennis’ coveted Rolland Garros, better known as the French Open. But that may not be only common feature between tennis and poker this year.

The Spanish blog PokerGenio posted a rumor that PokerStars had signed the Spanish tennis star, Rafael Nadal to a two-year endorsement deal (thanks Google translate). In a 2+2 thread on the topic, Marty “LipoFund” Mathis chimed in that he had “heard about this at the stars meeting.” 

Last year’s French Open final featured an epic showdown between Roger Federer and Rafael Nadal. Nadal prevailed in the hard-fought battle. By signing Nadal, Pokerstars may be looking to prevail in the increasingly costly battle for Spain’s online poker market.

Spain plans to launch regulated online poker on June 1st. A number of poker sites, including Bodog and Titan, have folded their hand in Spain, rather than pay the new regulated tax rate of roughly 20 percent. But the remaining poker sites are going to have to dig even deeper if they want to operate in Spain.

As Pokerati’s token chief European Joe detailed, cash-strapped Spain recently upped the ante by shaking down online poker sites for back taxes. PokerStars’ back tax bill is estimated to be roughly $250 million. If the rumor about Nadal is true, it will say a lot about PokerStars’ intentions to pay for residence north of Gibraltar.

Tax Court Ruling Favors Poker Pros

by , Apr 6, 2012 | 12:00 am

David in Dallas sends an FYI about a big ruling in Tax Court that should prove rather beneficial to poker players:

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:


Rake and Taxes

by , Apr 4, 2012 | 3:17 am

The drumbeat for action on online poker legislation continues to grow on Capitol Hill and in statehouses across America. Much credit is due to the commitment of the poker community. We have all refused to back down and have told Congress that we will never fold in this fight!

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.


Poker Player Tax Advice

by , Mar 26, 2012 | 7:35 am

With April 15 right around the corner, poker players are undoubtedly thinking about Black Friday Anniversary Parties remembering in the normal-people world that the real “Black Friday” isn’t until November, and oh crap, you mean federal income taxes weren’t just part of the tournament entry fee!?! And while there isn’t a blank specifically on a 1040 for seized funds or PokerStars T$, poker players (particularly those with online money in play) might-should presume they are being looked at more closely than ever for Fiscal 2011 — assuming, of course, you haven’t already been under full investigation and/or negotiated an IRS settlement as part of turning state’s evidence in the cases against your former poker-mates.

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:


The ABCs of Backing Deals

by , Jun 9, 2011 | 4:28 pm

Here’s a question from a reader that I thought might be useful to answer for everyone, including me! Chuck in Fort Worth writes:

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.


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. More…

Players Shouldn’t Expect Money Back without Facing Tax Problems

by , Apr 18, 2011 | 4:54 pm

Sanford Millar


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.


Gambling Biz Today


by , Feb 3, 2010 | 5:15 am

Here’s a quick rundown of what’s going on in one of the hungriest industries out there, and, game of skill or not, the parent biz of our beloved little poker world:

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.

IOWAThe 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.

LOUISIANAThe 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 JERSEYBig 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.

Pennsylvania Deciding on State’s Poker Future

by , Oct 5, 2009 | 8:44 am

A big poker-related legislative battle is going on right now in Pennsylvania. In fact, state representatives debated the matter well into the night on Sunday — an unusual move for the Pennsylvania House.

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.


Lodge Poker Revival Begins Today

by , Sep 13, 2009 | 9:50 am

Meet Sharron, the new tourney director at The Lodge.

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.



Costa Rica Seeking to Regulate, Tax Online Gambling Ops

by , Aug 31, 2009 | 3:34 am

Funny, here in the USA we’re screaming, “tax us! tax us, dammnit! for all in the name of freedom!” Elsewhere around the world they’re saying, yeah, we should tax … which has some companies considering new homes.

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.


Betfair Considers $2.5 Billion Public Offering

And other European online gambling maneuvers

by , Aug 24, 2009 | 10:52 am

Apparently our good friends across the pond are a bit more optimistic about the notion of the US opening its online gambling market in 2010 than we are … and in preparation, the buzz around England is that Betfair — the British online poker-and-more company and title sponsor of WSOP-Europe — is getting serious about making an estimated £1.5 billion ($2.5 billion) initial public offering.

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


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.

Weekend Wisdom (8/8-8/9): WPT & Menendez Bill

by , Aug 8, 2009 | 2:44 pm

A couple of great pieces for weekend reading…

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.