The biggest disadvantage of playing in the biggest annual poker tournament is without a doubt the income tax taken from every win that amounts to more than 5 000$ net. Of course, if you reside in a country which has a treaty with the United States you can avoid this tax. For American and Canadian players, if it’s usually quite easy to recuperate these taxes paid, it is quite a different story when you win a few million dollars in an event like the WSOP Main Event. While this year’s final table had five Americans and one Canadian, we can really say the biggest winner was the IRS.
American tax expert Russ Fox publishes every year a recap of the taxes paid by final table players. Here are the conclusions he was able to draw from this event.
We start with this year’s winner and new World Champion, Qui Nguyen, a Las Vegas resident for the last ten years. As a professional gambler, he will have to pay about 41.51%, or 3 327 157$ in income tax. Good news for him, Nevada does not add a State tax! Even though this seems quite an amount to pay, it is still the second lowest tax percentage. As a regular gambler, Mister Nguyen will for sure have all kinds of losses to oppose his winnings, thus lowering his fiscal debt.
Gordon Vayo has a serious inconvenience. Being a California resident, he must add a State tax to the IRS 30%. Combined, they represent 51.46% of his win. He will be left with only 2 262 428$ of his 4 661 228$ win.
Living in New York as does Cliff Josephy is better than California, but not a lot better. Josephy will give back 48.50% of his winnings, representing 1 674 568$ out of 3 453 035$ won.
Residing a few miles south, in New Jersey, will allow Michael Ruane to save 3% in comparison to Josephy. With the lower state tax, Ruane will give back 45.75% of his win, 1 178 525$ out of his win of 2 576 003$. Even with his 4th place, Ruane’ win is only the sixth net.
Vojtech Ruzicka, while saddened by his failed bluff attempt, can find solace in the fact he lives in the Czech Republic. Since this country has a tax treaty with the United States, he will be allowed to bring back the whole amount, 1 935 288$, back home, where he will be taxed at a fix rate of 15%. This represents 290 293$.
Kenny Hahhaert is the luckiest of the bunch. Actually, as is the case for Canadians, gambling wins are not taxable for amateur players in Belgium. AS he works as Tournament Director back home, his job will allow him to keep the whole win, 1 464 258$. Even better, because Belgium and the United States have a tax treaty, he will keep all of his winning!
Griffin Benger, 7th place finisher, is a Canadian resident. Because of this, he saw 30% of his win, 375 057$ out of 1 250 190$, kept by the IRS. Depending on his gambling activities in the USA in 2016, he will certainly be able to retrieve part of this amount by filing a Form 1040NR at the end of the year. For the moment, his taxes amount to 357 057$. It remains to be seen if the Canada Revenue Agency (CRA) will try to consider him as a professional player. According to the later, any activity conducted with the intention of making a profit is taxable, including gambling. However, justice has yet to agree with this logic. Indeed, his fate remains in a grey area for the moment. So far, the CRA has yet to win such a case, but they are still trying to do so. To this date, no file has been settled either way.
Jerry Wong, from Florida, has the same good fortune as Qui Nguyen, as Florida does not add its own tax to the federal tax. As a professional gambler, he will pay a self-employment tax so in total, he will pay around 38.16% on his win of 1 100 076$, representing 419 776$.
Fernando Pons will not pay any tax in the US on his million dollar win, but his home country of Spain is awaiting him. His tax will amount to 45% of his gain, so he will give back 450 000$ to his government.
Ultimately, 10 109 760$ out of the 25 445 338$ at stake at this final table will find their way back to the winners’ governments. Overall, this represents 39.73%. The IRS alone will keep about 8 108 024$, more than what Qui Nguyen won!
Forget about the old saying; that the house always wins. The real winner is always the government!
