Poker news | Feb 26, 2021
WSOP Champ Jonathan Duhamel Facing $1.8 Million Tax Battle with Canada
By RTR Dennis
2010 WSOP Main Event champ Jonathan Duhamel is currently battling Canadian tax authorities over a seven-figure sum.
The Canada Revenue Agency (CRA) claims that Duhamel’s poker winnings fall under the country’s business guidelines—as opposed to non-taxable gambling winnings.
They now allege that Duhamel owes CA$1,219,114 in federal taxes dating back to 2010-2012. If these claims prove true, he’d owe nearly the same amount for Quebec state taxes, bringing the overall total to CA$2.4 million (US$1.8 million).
Games of Chance vs. Professional Gambling
Canada doesn’t classify recreational gambling winnings as a taxable event. So if you win a $100,000 slots jackpot in the Great White North, then you’re not on the hook for taxes.
However, the CRA considers professional gambling akin to running a business. They believe that, based on Duhamel’s skill and long-term success, he’s indeed been running a poker-related business.
According to The Canadian, the CRA asserts their claim through the following points:
- Duhamel “behaves like a serious businessman” in the poker world.
- His sole occupation since 2008 has been playing poker.
- He plays the game for between 40 and 50 hours per week.
- He can successfully multi-table up to eight tables when playing online.
- Outside of investments, poker is Duhamel’s only source of income.
Duhamel Argues that He Won Through Luck
Jonathan Duhamel has had great success in the poker world. He’s earned $18 million through live tournaments, including an $8.94 million score for winning the 2010 WSOP Main Event.
Many would consider the Canadian to be a professional poker player. For the purposes of this case, though, he’s arguing the contrary.
His main argument hinges on a 2006 decision by the Tax Court of Canada. In this case, Chief Justice Donald Bowman ruled that two sports bettors won millions of dollars based on luck and not skill. Therefore, the gamblers didn’t have to pay taxes.
However, Chief Justice Bowman specifically used poker pros and an example of gamblers who might need to cover taxes. That said, Duhamel will face a tough task in proving that he’s not a professional (i.e. running a business). His case will be heard in March 2021.
Other Interesting Findings from This Case
The 33-year-old poker player had to submit information about his career to the judge. As a result, some intriguing findings have come out about Duhamel’s poker activities.
For starters, he swapped action with other players before the 2010 Main Event. He ended up paying his partners $4.1 million of his $8.94 million first-place prize as a result of the swaps.
Duhamel received a $1 million contract from PokerStars the following year. This deal covered $520,000 in live tournament buy-ins and paid the remaining $480,000 in cash.
Many poker players have wondered how much notable pros receive, or used to receive, from sponsorships. This tax case provides insight into the matter.
Why Is the CRA Only Focusing on 2010-2012?
One strange aspect of this story is that the CRA is only fighting for tax money from years ranging between 2010 and 2012.
Duhamel earned the majority of his winnings during this period—namely on the strength of the Main Event victory.
However, he’s collected another $7 million in the years afterward. He notched his second biggest payout of $4 million by taking second in the 2015 WSOP $111,111 High Roller for ONE DROP.
Of course, most of these winnings don’t constitute pure profits. This is especially the case with swaps involved. Hopefully for Duhamel, the CRA just sticks to the three-year period that they’re currently fighting over.