After losing to former champion Jonathan Duhamel last year, Revenue Canada had better luck against two other poker players who may have to pay taxes 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 are not taxable unless the person pocketing them behaves like “reputable” businessmen, the Finance Court said in rulings last week.
In court Mr. Bérubé and D’Auteuil testified that in poker they “seeked above all the competition, the adrenaline, the ‘thrill'” and that their behavior was “risky, reckless and irrational,” summarized Judge Réal Favreau.
Photo by playgroundpoker.ca
Former poker player Antoine Bérubé could face $850,000 in taxes in Ottawa and Quebec City if recent Canadian Tax Court rulings are upheld.
Addiction as a defense
They further claimed that they did nothing in particular to minimize their risk-taking and regularly gambled under the influence of alcohol or drugs.
The fact that they played poker almost exclusively from 2008 to 2011 and didn’t have a job to support themselves didn’t mean they ran a business, in their opinion.
very active
Photo by playgroundpoker.ca
Philippe D’Auteuil
poker player
professional
During those four years, Antoine Bérubé and Philippe D’Auteuil played poker 255 to 330 days a year, often for several hours a day and at multiple tables simultaneously.
The tax authorities also found that the two players used Holdem Manager software, which notably allows users to keep their personal statistics and get information about their opponents.
MM. Both Bérubé and D’Auteuil could purchase real estate for cash, the judge noted in his judgments.
Despite their “non-standard way of life”, the two players “have the behavior of serious businessmen”, Judge Favreau judged.
They wanted profit
“On a balance of probabilities [ils avaient] the subjective intention to make a profit through engagement [leurs] poker activities” and use their skills “to win [leur] Life in poker, a gamble where skill plays a big role,” he added.
The men’s attorney, Danny Galarneau, told the Journal yesterday that he would appeal the two sentences. Me Galarneau has already appealed another decision by the same judge last fall against another millionaire, Martin Fournier-Giguère.
If settled, Mr. Bérubé and D’Auteuil are expected to pay approximately $850,000 and $2 million in Ottawa and Quebec taxes, respectively (a portion of their winnings are non-taxable due to deductions).
THE TAX FOR POKER MILLIONAIRES
- Jonathan Duhamel
disputed profits: $5.4M (2010 to 2012)
Result: Player wins - Martin Fournier Giguere
disputed profits: $1.7M (2008 to 2012)
Result: tax victory - Antoine Berube
disputed profits: $3.2M (2008 to 2011)
Result: tax victory - Philippe D’Auteuil
disputed profits: $5.1M (2008 to 2011)
Result: tax victory