Why aren't poker winnings taxable? Or are they?

bmc

So...

Why aren't our poker winnings taxable? Or are they? You pay tax on the most popular other form of gambling... in the bookies...

The national lottery has a license to give out tax free prizes...

Is it because the casinos are private members' clubs, simply redistributing cash amongst members?

Or should we all be declaring our winnings and offsetting our costs against them?

I don't believe that they are taxable but I don't know the reason why... and I could be wrong...

Has any smartie got the answer?

gerire

You pay tax on the bet you place in the bookies but not on the winnings paid out, as is the same with on-course betting you dont pay tax either way ie on the bet or the winnings.

Apparently the reason there is so many tax breakes in horse racing (ie tis basically all tax free) is because there is so many TD's and high society types that have shares in horses and yards and itr was decided years ago that they didnt want to pay leisure money tax << not sure if this is true.
So Im sure there is some loophole in there that allows us to not have to declare anything. I think you might me right about circulating money among all the players ie we all put in the prize fund and thats how the winnings come about

Also Why do you want to pay tax on your winnings?

MrPudding

If you had to pay tax on your winnings then your losses would have to be tax deductable.

MrP

Hobart

Originally posted by gerire
Apparently the reason there is so many tax breakes in horse racing (ie tis basically all tax free) is because there is so many TD's and high society types that have shares in horses and yards and itr was decided years ago that they didnt want to pay leisure money tax << not sure if this is true.

[OFF TOPIC]The above is a well believed but totally untrue perception. Tax breaks on equine pusuits were introduced to allow a country as small as Ireland to "punch above it's weight" on the world stage when it comes to breeding, in particular, but all equine pursuits. Also many of the top breeders, such as the Arabs and the Aga Khan patrionise thier top stallions and so do not avail of the tax free status on the breeding income. The simple fact is that the horse industry, including betting, puts a lot more into the economy than it "takes out" through tax breaks, and this cannot and is not ignored[/OFF TOPIC]

* edit for spelling mistakes

gerire

I knew full well Hobart was going to come in and sort this out Good Mod Hobart;)

bmc

Nobody said that I want to pay tax on poker winnings, however, I have a level of curiosity about this that may well kill a cat...

I've asked this question over on the "ask about money" forums too, to see what some of the tax experts may have to say.

Here's the link.

Anyway, who's to say that I'm not thinking about turning pro?


<SHOPKEEPER> That'll be €93.45
<ME> Hmmm... I'll trade you this €100 poker voucher...
<SHOPKEEPER> What?
<ME> It's for a Tuesday night. I don't mind if you keep the change!
<SHOPKEEPER> *$%^?

Kelter

Winnings?

What winnings?













Also I'm with hobart on that one.

there is so many TD's and high society types that have shares in horses

Would you say this man comes from a land of begrudgery

Hyzepher

Generally you have to declare all income each year on your Tax Return. Gambling is taxable - except for certain areas like lotto etc. A poker pro for example still needs to pay tax on his winnings - he can of course off set his losses (entry fees etc) against tax but all profits are taxable.

Hyzepher

bmc

A poker pro for example still needs to pay tax on his winnings - he can of course off set his losses (entry fees etc) against tax but all profits are taxable.

So you reckon that the answer is that they are taxable... and of course there's no difference between a pro and someone with a day job who gets the occasional win when it comes to this.

I wonder if the boom in popularity will end up affecting the current "blind eye" that revenue seem to be showing then...

Juan Pablo

Only applies to the states though. Since we no longer pay tax in the bookies I dont see why we should declare.





Boring tax guy

kencleary

Poker winnings and indeed Gambling winnings in general are NOT taxable. It's classed as a hobby rather than a trade even if it is your primary source of income. If they were taxable as Mr Pudding says "If you had to pay tax on your winnings then your losses would have to be tax deductable". I can't find the relevant legislation on the Revenue.ie site but trust me i'm a part-qualified accountant

Waylander

Only applies to the states though. Since we no longer pay tax in the bookies I dont see why we should declare.

There is still a tax on bets placed in a bookies shop, although there is none on Internet betting because of a legal loophole. However alot of the shops have now started to take the hit themselves as their competition is doing this in a bid to get the customers in the door.

Hobart

Also remember that when it comes to betting, 100% sure WRT Horse Racing not so sure with poker, that there is NO legal obligation on the part of the bookmaker to pay you when you win. Gambiling with a bookmaker, placing a bet, is NOT a legal contract. It is a gentlemans agreement. I would imagine that the same holds true for any gambling such as poker etc...

kencleary

Quite right Hobart the same does hold true for any form of gambling.

MrPudding

Over on the mainland /snigger...ducks for cover/ you do not have to pay tax on poker income.

MrP

kencleary

You don't here either............

Juan Pablo

There is still a tax on bets placed in a bookies shop

Not anymore mate, not in town anyway due to competition. Suburbs perhaps but anywhere I've been to in the past few months has 0% tax.

Waylander

That is what I said, due to competition alot of the bookies have started to take the hit themselves. The tax is still there but they do not pass it on to the punter anymore.

Juan Pablo

My apologies Waylander.

amp

Originally posted by MrPudding
Over on the mainland /snigger...ducks for cover/ you do not have to pay tax on poker income.

MrP

Cool. Whereabouts where you? France? Netherlands?

DeVore

A more pertinent question would be "why cant you set your poker losses off against income tax"

DeV.

kencleary

...........Because then you'd also be taxed on your winnings. Though I suppose from your point of view setting off the losses would be worth much more

bmc

A more pertinent question would be "why cant you set your poker losses off against income tax"

You beat me to that question... I was letting it build up... my comic timing was never good... anyway, I'm not sure that you could offset expenses/losses on one source of income against another source of income...

Right, so what we've established so far is that there is still tax charged on making a bet at the bookies... (not necessarily on winnings). But we seem to think that poker is tax free because it's recreational gambling? confusing...

The other thing that confuses is me is, why do the Lotto emphasise that their prizes are tax free if all recreational gambling is tax free? Although it could of course simply be a marketting tag line...

bmc



Soon to be known as "boring tax questions guy" rather than newbie

kencleary

Originally posted by bmc

Right, so what we've established so far is that there is still tax charged on making a bet at the bookies... (not necessarily on winnings). But we seem to think that poker is tax free because it's recreational gambling? confusing...

Not quite, all gambling is considered a recreational activity rather than a trade therefore it does not fall under any taxable schedule therefore is tax free. The tax you pay in a bookies is a tax levied on placing a wager, the winnings you may gain from that wager are tax free. The levy placed on the wager is simply an expedient way to gain revenue for the exchequer much like the tax on a pint i.e. it's easily collected, is a small proportion of the bet anyway and can always be defended as being designed to correct peoples bad behaviour. If they were to tax gambling winnings it would open up a huge can of worms. Gambling would then become a trade and people who practice trades have certain rights under out taxation system - they can claim VAT back from the Government, they can write off expenses incurred in their trade against their tax liability and can carry foward losses from one period to another to offset gains. In short it wouldn't nearly be worth the hassle for the miniscule revenue it would bring in.

Hyzepher

*ahem* Just got off the phone with my accountant *ahem* and he say that gambling is a big grey area. In general it is tax free but if the revenue think that your primary income comes from gambling then they might view it as a trade - the same way a bookie is a trade.

In that case you would be expected to pay tax on your profits -> Winnings - Losses, of course this is very difficult as casinos etc don't tend to give out receipts.

So in the main all gambling income is tax free.

Hyzepher

bmc

The tax you pay in a bookies is a tax levied on placing a wager, the winnings you may gain from that wager are tax free.

...and now it all makes sense...

I was heading towards that conclusion in my last post...

Thanks lads...



pro circuit, here I come...


Edit:
Just saw your message now Hyzepher...

but if the revenue think that your primary income comes from gambling then they might view it as a trade

I'm guessing that I'm better off staying semi-pro for now...

MrPudding

Originally posted by bmc
[B

I'm guessing that I'm better off staying semi-pro for now... [/B]

Or move to the UK and become a resident there. Pro poker players pay no tax on their winning.

MrP

DeVore

I dunno if gambling IS tax free but its too small-potatoes for the Revenue to chase after...

Hey Ken, I dunno but how many here can say they have made profit over the entire time since they started playing poker?


DeV.

Hectorjelly

Originally posted by DeVore
I dunno if gambling IS tax free but its too small-potatoes for the Revenue to chase after...

Hey Ken, I dunno but how many here can say they have made profit over the entire time since they started playing poker?


DeV.

Does no one else keep records? I know my profit/loss to the nearest 100 Euro.

Lafortezza

Originally posted by Hectorjelly
Does no one else keep records? I know my profit/loss to the nearest 100 Euro.

Do you include home games as well as online and casino live games in that?

DeVore

I keep a rough total though I'm planning on being a bit more exact about it.
I spend about 600 a month and average about 1000 in winnings so far...
I include home games as well as any other place I play poker.

DeV.

Victor

The Revenue Commissioners are of the opinion that losses more or less match winnings, so normally no tax is payable.

Professional gamblers (in particular bookies, but also other individuals on a case by case basis) do pay income tax on their winnings. They are also allowed set off reasonable expenses (no, not smoking and hard drinking) against income. Gambling is treated as a trade, not a profession.

As I understand it betting tax can be paid on bets or winnings (that had been the case anyway).

The lottery is advertised as tax free as not all lotteries internetionally are tax free.

Hobart

Originally posted by Victor
As I understand it betting tax can be paid on bets or winnings (that had been the case anyway).

Not in Ireland. It used to be the case in the UK, you were given the choice.

Hectorjelly

Originally posted by lafortezza
Do you include home games as well as online and casino live games in that?

I do keep a rough track of offline spendings but its obviously much harder, but when I play offline it tends to be less often and for much lower stakes.