Australian Taxes? [Archive] - Two Plus Two Newer Archives

vilemerchant

06-22-2007, 01:24 AM

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I live in Australia. Gambling income is not taxable unless you are playing "as a business", which has a loose definition. There has only been one successful prosecution in the history of Australian gambling tax law. That was a guy making half a mill per year off horses. He had offices, employed people to do legwork for him, and kept records. That all added up to a business. If you have another job, there's no chance you will be prosecuted, so don't worry about it.

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What if you don't have another job?

I am currently living outside of australia living off poker and am wondering if I can just transfer money from a third party online account (not specifically associtated to poker) to my aussie account and if this can be considered taxable money...

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Are gambling winnings taxable in the country you live at? If they're not, see if you can file a tax return there and declare the gambling winnings (but not actually pay tax on them). Then if the ATO ask any questions about the bank transfers you can show the money was not 'laundered' but earned overseas and already subjected to the tax laws there.

06-22-2007, 06:46 AM

JackAll

06-24-2007, 11:42 AM

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I live in Australia. Gambling income is not taxable unless you are playing "as a business", which has a loose definition. There has only been one successful prosecution in the history of Australian gambling tax law. That was a guy making half a mill per year off horses. He had offices, employed people to do legwork for him, and kept records. That all added up to a business. If you have another job, there's no chance you will be prosecuted, so don't worry about it.

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What if you don't have another job?

I am currently living outside of australia living off poker and am wondering if I can just transfer money from a third party online account (not specifically associtated to poker) to my aussie account and if this can be considered taxable money...

[/ QUOTE ]

Are gambling winnings taxable in the country you live at? If they're not, see if you can file a tax return there and declare the gambling winnings (but not actually pay tax on them). Then if the ATO ask any questions about the bank transfers you can show the money was not 'laundered' but earned overseas and already subjected to the tax laws there.

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I'm living in thailand - and in thailand gambling is a crime punishable by life imprisonment. So I can't declare it there.

vilemerchant

06-24-2007, 08:56 PM

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I live in Australia. Gambling income is not taxable unless you are playing "as a business", which has a loose definition. There has only been one successful prosecution in the history of Australian gambling tax law. That was a guy making half a mill per year off horses. He had offices, employed people to do legwork for him, and kept records. That all added up to a business. If you have another job, there's no chance you will be prosecuted, so don't worry about it.

[/ QUOTE ]

What if you don't have another job?

I am currently living outside of australia living off poker and am wondering if I can just transfer money from a third party online account (not specifically associtated to poker) to my aussie account and if this can be considered taxable money...

[/ QUOTE ]

Are gambling winnings taxable in the country you live at? If they're not, see if you can file a tax return there and declare the gambling winnings (but not actually pay tax on them). Then if the ATO ask any questions about the bank transfers you can show the money was not 'laundered' but earned overseas and already subjected to the tax laws there.

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I'm living in thailand - and in thailand gambling is a crime punishable by life imprisonment. So I can't declare it there.

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Haha. Sounds like the games there are quite -EV!

JackAll

06-25-2007, 12:02 PM

Nah - they are technically pretty sucky.
They will never be able to catch someone gambling online.

Josem

06-26-2007, 08:54 PM

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All of this begs the obvious question: Is it difficult to get Australian Citizenship? Anybody know how long the process takes?

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www.immi.gov.au (http://www.immi.gov.au) has the answer to your question.

Josem

06-26-2007, 08:55 PM

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What if you don't have another job?

I am currently living outside of australia living off poker and am wondering if I can just transfer money from a third party online account (not specifically associtated to poker) to my aussie account and if this can be considered taxable money...

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A thread with excellent links to info on this is at http://forumserver.twoplustwo.com/showflat.php?Cat=0&Number=10128260&Main=10059146

DanJ.

07-23-2007, 06:33 AM

Ok i have recently seen 2 accountants and asked them what i should be doing about tax and both of them said that i am going to have to pay tax because poker is what i do for a living.

so i was like, well i know about 10 ppl in australia who havnt paid any $ in tax why havnt they been caught? and the accountants were like "theyre just lucky, theyll get caught eventually"...so i was kinda like uhhh ok...and then basically i was told that if i get 'caught' im gonna hve to pay a [censored] of penalties.

So...my questions are, if my accountants are saying i have to pay tax but there are a bunch of ppl in australia who havent paid a cent for like 5 years like wtf is going on here?

what should i do about cashing money out? i make about $250kUSD/year and have been cashing out through bankwire.

thx for help.

Josem

07-23-2007, 06:46 AM

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Ok i have recently seen 2 accountants and asked them what i should be doing about tax and both of them said that i am going to have to pay tax because poker is what i do for a living.

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i continue to think this is right.

i suspect that most fulltime players would fall afoul (is that a word) of the six tests laid down by the courts.

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So...my questions are, if my accountants are saying i have to pay tax but there are a bunch of ppl in australia who havent paid a cent for like 5 years like wtf is going on here?

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there are a bunch of people who are not paying the tax they are supposed to pay - either intentionally or unintentionally.

in their defence, it seems unclear to me.

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what should i do about cashing money out? i make about $250kUSD/year and have been cashing out through bankwire.

thx for help.

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your tax obligations are not affected by your method of cashout. it doesn't matter how the money is credited to your account, if you earn it as taxable income, you must pay tax on it.

glenn wheatley is going to jail for trying to evade tax using internatinoal bank accounts.

DanJ.

07-23-2007, 06:53 AM

[censored] this [censored], im leaving the country.

Josem

07-23-2007, 06:55 AM

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[censored] this [censored], im leaving the country.

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you will obviously still have a tax liability for 06/07, and depending on your departure, you may have a liability for 07/08.

your accoutnant can inform you of the details.

Phil153

07-23-2007, 08:42 AM

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Ok i have recently seen 2 accountants and asked them what i should be doing about tax and both of them said that i am going to have to pay tax because poker is what i do for a living.

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I'm not an accountant, but these accountants don't know what they're talking about. Even if gambling is your sole source of income, provided it's not run as a business, you are exempt from tax. The courts have been extremely reluctant to classify gambling as business, see here for example:

http://law.ato.gov.au/atolaw/view.htm?find=(("gambling"))&docid=ITR/IT2655/NAT/ATO/00001 (http://law.ato.gov.au/atolaw/view.htm?find=(()

There's also the matter of proof - the ATO aren't going to subpoena records from another country to see when and how much you played. It's not how they work.

To be on the safe side, I'd do everything possible to make it seem like a hobby. Regular weekly/monthly withdrawals are probably a bad idea although I still think you'd be in there clear.

Anyway, there's a lot of money involved so get yourself some more opinions. I doubt there are any gambling specific accountants in Australia but if you get a good accountant and stress your point, they'll probably do the research to give you a definitive answer instead of giving a half arsed reply.

Phil153

07-23-2007, 08:44 AM

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i suspect that most fulltime players would fall afoul (is that a word) of the six tests laid down by the courts.

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Do you have a link? The only case law I can find seems to suggest poker players are in the clear.

edit: never mind, I assume you're referring to this?: http://law.ato.gov.au/atolaw/view.htm?ra...mp;pn=ALL:::ALL (http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~gambling~basic~exa ct&target=JB&style=java&sdocid=ato/cds10095&recStart=1&PiT=99991231235958&recnum=16&t ot=360&pn=ALL:::ALL)

However, I don't see how it applies to poker. Some of the big points are inside information, owning a share of the greyhound, and laying bets on behalf of others. I'd suggest that given previous high court rulings, these are the things that make it "businesslike".

Josem

07-23-2007, 08:54 AM

key links:
http://law.ato.gov.au/atolaw/print.htm?DocID=ITR%2FIT2655%2FNAT%2FATO%2F00001

http://law.ato.gov.au/atolaw/view.htm?ra...amp;pn=ALL:::CC (http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~gambling~basic~exa ct&target=CC&style=java&sdocid=JUD/89ATC5227/00001&recStart=1&PiT=99991231235958&recnum=7&tot=5 0&pn=ALL:::CC)

that second link, a case involving these sorts of issues, includes the following:

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The principal criteria by which questions of the present sort appear to have been judged are the following:

1. whether the betting is conducted in a systematic, organised and ``businesslike'' way;
2. its scale: i.e. the size of the wins and losses;
3. whether the betting is related to, or part of, other activities of a businesslike character, e.g. breeding horses;
4. whether the bettor appears to engage in his activity principally for profit or principally for pleasure;
5. whether the form of betting chosen is likely to reward skill and judgment or depends purely on chance;
6. whether the gambling activity in question is of a kind which is ordinarily thought of as a hobby or pastime.

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so, if you clear each of those tests, you are probably not gambling as a business.

I suspect that most fulltime players will:

1) bet systematically (obviously)
2) bet large enough for it to be considered significant
3) probably clear this one
4) doing it for profit
5) likely to reward skill and judgement
6) dunno.

4/6 is a fail, methinks. though i'm no lawyer, and certainly no judge - where this issue will eventually be decided.

kidpokeher

07-23-2007, 11:39 AM

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[censored] this [censored], im leaving the country.

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Yeah, come to the U.S. Things are so much better here. /images/graemlins/tongue.gif

kidpokeher

07-23-2007, 12:02 PM

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All of this begs the obvious question: Is it difficult to get Australian Citizenship? Anybody know how long the process takes?

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www.immi.gov.au (http://www.immi.gov.au) has the answer to your question.

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I wish it did. I just spent the last hour reading this site. In short it says you need to be a resident for four years before applying and you need to take a test. I couldn't find anything about what it takes to migrate and become a resident.

BruceN

07-23-2007, 06:05 PM

Ok. lets confirm the real facts here. My credentials are an Australian CPA and I work in taxation public practice.

The advice from the two accountants was poor, at least to the extent that they should have made confirmation of the facts eloquently expressed by the other poster concerning the "business test".

At this point, looking at the available facts and cases, poker would not be considered a business. There is a very good reason for this, and that is under Australian Taxation Law if your enterprise/activity is considered a business, its turnover is more than 20k a year, and you lose money, it can be deducted against other sources of income.

The ATO would hate to suddenly open the door to every gambler donking 20 k plus at the 10/20 in the Crown poker room to be claiming a tax deduction after saying they were a business. Therefore gambling Income has overwhelmingly been considered "windfall gain" under Australian tax law and there has been a general reluctance to push the boundaries further after the famous horse racing case.

The best equivalent situation Im aware of is a prominent Australian black jack card counter who could be considered very systemised in approach has investigated the same issue thoroughly and come to the same conclusion. He may have received a private ruling from the ATO but due to privacy issues I couldnt get this confirmed.

Now a word of caution, this doesnt mean that the ATO wouldnt at some time in the future want to test the boundaries of the case law in regards to the gambling/business definition, my advice is if comfort is needed you could get your accountant to prepare a private ruling application.

I would be most interested to hear the outcome.

regards

Bruce

Josem

07-23-2007, 07:28 PM

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I couldn't find anything about what it takes to migrate and become a resident.

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http://img254.imageshack.us/img254/6145/42066700bg1.png

http://img254.imageshack.us/img254/7926/44678070gg4.png

http://img401.imageshack.us/img401/8468/66359014yp9.png

Poker CPA

07-24-2007, 02:38 PM

Not taxable - very EZ. Bruce is correct. Keep working for your dad, you're learning the business from the ground up, without pay. You just happen to be a good poker player.

Bruce, your undergrad studies were from ?????

BruceN

07-24-2007, 05:05 PM

Actually, studies were a bit convoluted. My original degree was a BA from the University of Adelaide then after commencing my working career I completed part time a "Graduate Conversion course in accounting" from the University of Tas at Launceston . However , I completed 5 units doing a B.Ec at Adelaide, and switched to the Tasmanian course which was by correspondence, receiving status for most of the subjects completed.

Have worked in public practice for the past 16 years.

regards

Bruce

kidpokeher

07-24-2007, 10:52 PM

Yes, I was there. The problem is from that point it appears they're looking for specific occupations and, not surprisingly, poker players aren't on the list.

Why can't you be more like the U.S. where anyone can come regardless of skills, health, work history or criminal background? I'm mean, c'mon you're even asking us to know how to speak English.

Josem

07-24-2007, 11:31 PM

to avoid hijacking this thread into a discussion of Australian migration policy, i've answered the question about migration in the travel forum here: http://forumserver.twoplustwo.com/showth...D=#Post11366773 (http://forumserver.twoplustwo.com/showthreaded.php?Cat=0&Number=11366773&page=0&vc=& PHPSESSID=#Post11366773)

DanJ.

07-25-2007, 12:20 AM

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Not taxable - very EZ. Bruce is correct. Keep working for your dad, you're learning the business from the ground up, without pay. You just happen to be a good poker player.

Bruce, your undergrad studies were from ?????

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no, i no longer work for my dad, i moved out of home a while ago and now all i do for money is play poker.

DanJ.

07-25-2007, 03:30 AM

ok, just got home from accountant. I actually showed him this thread, he didnt read all of it but read my posts and BruceN's post...

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The ATO would hate to suddenly open the door to every gambler donking 20 k plus at the 10/20 in the Crown poker room to be claiming a tax deduction after saying they were a business. Therefore gambling Income has overwhelmingly been considered "windfall gain" under Australian tax law and there has been a general reluctance to push the boundaries further after the famous horse racing case.

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With this, he said that he agreed with it, but in my case im not losing money im winning and i dont have any other way of proving it was from anything apart from poker, therefore id have to pay tax

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my advice is if comfort is needed you could get your accountant to prepare a private ruling application.

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and the accountant said if i realy wanted to i could do that, but all it does is raise a flag on my case and it could change in the future. like, my circumstances could change in the future and it could just [censored] me up even worse.

fitnessfreak

07-25-2007, 04:46 AM

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The ATO would hate to suddenly open the door to every gambler donking 20 k plus at the 10/20 in the Crown poker room to be claiming a tax deduction after saying they were a business. Therefore gambling Income has overwhelmingly been considered "windfall gain" under Australian tax law and there has been a general reluctance to push the boundaries further after the famous horse racing case.

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With this, he said that he agreed with it, but in my case im not losing money im winning and i dont have any other way of proving it was from anything apart from poker, therefore id have to pay tax

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whilst i still am very confident that poker winnings are not taxable in australia, i did just think of a way to possibly ease your mind in this respect. just sign into party blackjack and play some hands there. then you have two different "games" you are playing, one of which they arent going to want to go near.

you also have to remember that if the ATO did come after you then they would have to be able to prove the winnings that you made came from poker alone. they are going to have a hell of a time trying to get all of the records from party poker to put a timeline in showing that you were systematically profiting from poker.

im not an accountant but i did study income tax law at the university of western australia, and because at the time i was just getting into playing home games w friends, i decided to ask my lecturer about it. i was assured that poker winnings would be very unlikely to be considered taxable income. it is pretty clear from the case law about gambling as a business in relation to horse racing that pooker was not really part of the consideration, and i fail to see how a poker player's winnings could be taxable pursuant to the decisions outlined in those cases.

as i said in another thread on this issue, if it becomes more of a serious issue i will look into it further. i have a couple of friends who specialise in taxation law who i can call on if it comes down to it but for now im not worried about it at all and i dont think you should be either.

oh yeah Dan, if you find any of this info useful or comforting you can feel free to softplay me at the tables for a week as a sign of appreciation! /images/graemlins/wink.gif

Josem

07-25-2007, 04:54 AM

Without commenting on the rest of your post:

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you also have to remember that if the ATO did come after you then they would have to be able to prove the winnings that you made came from poker alone. they are going to have a hell of a time trying to get all of the records from party poker to put a timeline in showing that you were systematically profiting from poker.

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this part is completely wrong. I was speaking to a person who I trust absolutely on this topic (but who would prefer not to be quoted/identified here - pm me if you genuinely care) who highlighted that once the ATO decided on a particular assessment, <u>you</u> need to prove otherwise.

this can obviously incur costs on the individual, and the discussion I had was in the context of this allegedly being unfair to the individual who may have done nothing wrong and has no recourse to recoup their costs.

fitnessfreak

07-25-2007, 05:48 AM

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Without commenting on the rest of your post:

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you also have to remember that if the ATO did come after you then they would have to be able to prove the winnings that you made came from poker alone. they are going to have a hell of a time trying to get all of the records from party poker to put a timeline in showing that you were systematically profiting from poker.

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this part is completely wrong. I was speaking to a person who I trust absolutely on this topic (but who would prefer not to be quoted/identified here - pm me if you genuinely care) who highlighted that once the ATO decided on a particular assessment, <u>you</u> need to prove otherwise.

this can obviously incur costs on the individual, and the discussion I had was in the context of this allegedly being unfair to the individual who may have done nothing wrong and has no recourse to recoup their costs.

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yeah, i think ur right that once the ATO makes an assessment the onus shifts to the individual. my bad. and i guess the ATO would be able to look at your bank details and put the burden you to show that the money wasnt earned from poker. pretty [censored] system really.
the irritating thing is that the ATO can just make this decision and screw anyone over who happens to be affected by it. however, i still believe that they will probably steer clear of trying to tax poker players due to the great number of live and online donks who will claim deductions against their other income from their poker losses.

this thread has prompted me to have a bit more of a look into it over the next few weeks as i have seen some interesting points made supporting the idea that poker pro's in australia could be liable to tax on their winnings. it would be a real pain for a lot of people if it came to that and the ATO applied the tax retrospectively. ill post up anything useful or relevant that i find out.

Phil153

07-25-2007, 11:27 AM

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The ATO would hate to suddenly open the door to every gambler donking 20 k plus at the 10/20 in the Crown poker room to be claiming a tax deduction after saying they were a business. Therefore gambling Income has overwhelmingly been considered "windfall gain" under Australian tax law and there has been a general reluctance to push the boundaries further after the famous horse racing case.

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With this, he said that he agreed with it, but in my case im not losing money im winning and i dont have any other way of proving it was from anything apart from poker, therefore id have to pay tax

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This is really not an acceptable answer given the depth of the issue, and fails to address the actual point made, as well as the relevant law mentioned above.

I had a business related tax question a while ago and had to go through two accountants before I found one who'd give me a straight answer instead of covering his arse. If you've got a signficant amount of money at stake, don't be afraid to shop around for more opinions.

DanJ.

07-25-2007, 10:13 PM

To be more specific...he asked me what i would say if the ATO came knocking on my door and said where have u got all of this money from? my answer was online poker.

then he said, right given all the information you have shown me (PTSS, bankstatement and any online poker info i talked about) IMO if the ATO filed a case against you they would win 98 - 99% of the time, because 1) its systematic, 2) theres a lot of money at stake. 3) you play for profit and 4) its a game of skill.

Spartak

07-26-2007, 03:51 AM

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To be more specific...he asked me what i would say if the ATO came knocking on my door and said where have u got all of this money from? my answer was online poker.

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If they did knock on your door why can't you just tell them you won some big online blackjack jackpot and that is where the money is from?

BruceN

07-26-2007, 08:54 AM

Lets answer some of these points raised by Dans accountant.

1. Its systematic. Running and analysing Poker tracker stats doesnt make something systematic in the very organised sense found in the horse racing case.
2. Just winning money doesn't give the activity the character of enterprise or business. I can't for the life of me see how a singular poker activity can be classified as either in the sense of how I understand the definition under Australian Tax law. In fact, the sense of poker is very much one of hobby or pastime. Many people make a profit from hobby or pastimes but these are not considered to be either enterprises or businesses.

3. It makes money - Well, after a negative run of standard deviation will he submit a loss return? Never in a million years and this is a crucial argument .

4, Play for profit, - well, how about because you enjoy it? Sounds like a hobby or pastime to me.

5. seeking a private ruling for comfort will alleviate the drama of the ATO knocking at the door, I would rather hear you have done this than just pay tax.
6. its a game of skill - Well he got that right but see the Commissioner run when you go on a current affair saying that your poker activity is considered taxable income and the Crown donks start trying to deduct their losses, and the failed Blackjack card counters, and the Roulette wheel spin specialists, and the poker machine jackpot teams, you get my drift? Everyone convinced they have great skill of course.

Dont worry about substantiating where the money comes from, the poker sites, Neteller records and PT would be more than ample.

cheers

Bruce

BruceN

07-26-2007, 09:13 AM

Further to my comments, I have posted here an extract from the ATO ruling IT2655(goes back to the early 1990's) on gambling. Although the specific context is horse racing, look at the judges comments regarding the "business test".

"In Babka, the Federal Court (Hill J) again proceeded on the assumption that mere punting may constitute a business but, as in Evans, found it unnecessary to reach a final conclusion on the matter because, even if betting activities are inherently capable in some circumstances of constituting a business, the facts of the case did not reveal the taxpayer to be carrying on any business at all. His winnings were therefore not assessable. The taxpayer did not follow any betting system but he did place bets in accordance with several guiding principles. Judgment and instinct both played a part in the taxpayer's selection of horses on which to bet as well as in his choice of the amount and type of bet placed. That was sufficient to negate the concept of system and organisation which is the hallmark of a business. The taxpayer's activities "could [not] be said to exceed those of a keen follower of the turf". Hill J indicated that today mere punting, particularly with the growth of modern technology such as computers, could be so organised, systematic and businesslike and so dedicated to profit-making as to constitute a business. However, his Honour went on to say that the intrusion of chance into the activity as a predominant ingredient at least in the outcome of the race itself suggests that it will be a rare case where a court will conclude that the activity is a business."

Never forget, the courts determine tax law not the Tax Office.

Further to this, I found an AAT case where a Greyhound owner was found to have been earning income from betting, but in this case his knowledge was so profound of the industry that he was literally affecting the odds on the outcome. Very different to poker.

hope this all helps clarify things a bit.

Bruce

Josem

07-26-2007, 09:21 AM

the idea that a pro poker play is not playing in a systematic way is absurd.

have a look at pokertracker stats etc.

Phil153

07-26-2007, 09:39 AM

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Lets answer some of these points raised by Dans accountant.

1. Its systematic. Running and analysing Poker tracker stats doesnt make something systematic in the very organised sense found in the horse racing case.

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I would add that there is no requirement to offer your entire PokerTracker records or reveal the extent to which you participate in online forums to systematically learn winning play. In terms of earned income, it should be sufficient to show where the money came from. Even hours of play are largely irrelevant.

This isn't some criminal trial, it's a tax ruling (if it even comes to that), and while you should tell the truth when specifically questioned, you're not required to detail every last bit of how you play poker.
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4, Play for profit, - well, how about because you enjoy it? Sounds like a hobby or pastime to me.

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I don't find the profit motive compelling. In previous cases (for example, the Asian businessman who invested a percentage of his business assets into a casino card counting system) there was a strong profit motive, and yet this wasn't sufficient to make it a business.

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6. its a game of skill - Well he got that right but see the Commissioner run when you go on a current affair saying that your poker activity is considered taxable income and the Crown donks start trying to deduct their losses, and the failed Blackjack card counters, and the Roulette wheel spin specialists, and the poker machine jackpot teams, you get my drift? Everyone convinced they have great skill of course.

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Yes, the accountant is completely ignoring the pragmatics of the situation.

jimmyhat1000

07-26-2007, 01:38 PM

Ive spoken to an accountant (one who doesnt beat around the bush and dribble useless s**t) and he gave me the following advice.

1. - Do as much as possible to make it look to the ATO like game of chance/luck etc. Although it sounds weird because you would think large amount would attract mor attention than regular smaller cashouts his advice was to cashout one big amoutn every 2-3 months, make it look like you are some idiot who is getting lucky every now and tehn in a tournament.

2. Dont keep "records" as such, but "convienently have on hand" everything that you would be able to claim as a tax deduction if you were to be taxed, reciepts etc etc

3. If, worst comes to worst , and you do get audited/busted, plead innocent. Simply say "oh, tax?? but im gambling, isnt this just like blackjack where if you win you just put the money in your pocket like every other person who strolls into the casino on a weekend does". Although t sounds dumb, its something.

I've also been told that if you can actualy get off your a** and do something with ur poker $$ like invest it into something that would return an income so you have ti pay tax, eg 50k in managed fund, investment property. Then you can oay tax on that and your poker earnings can fly a little lower under the radar, would the lawyers/accounttants please be able to discuss/advise wethere any of this is good or not??

thank you

BruceN

07-26-2007, 05:25 PM

Josem, a poker player does not use a "system" when betting, which is what the cases mean by systematic. Many variables affect the decision as to whether to bet in poker, your opponent, your position, the cards etc.I undertand what you are trying to say, but this is not what is meant by systematic when reference is made to the cases in my view.

Reading between the lines of the cases it appears that the system seemed to be able to affect the consequent odds offered, to the extent that the chance factor was almost eliminated. This fact is what is likely to tip the court, as in the horse racing case (which set the precedent for aussie case law) the punter not only had business premises and was very close to the bookies, but had intimate knowledge of the industry. The way he bet was systematic.

In the greyhound case he owned dogs and would place bets on behalf of others, his whole life revolved around the industry. Again, his betting virtually eliminated chance as a factor in the outcome, due to his superior industry knowledge.

So systematic is more a reference to both betting patterns and also how the enterprise is conducted, ie in a business premises, with employees, etc.

In fact, looking at the detail of some of the judgements, the fact that cards are random makes it very unlikey in my view the courts would ever rule poker to be a game that eliminates chance as a factor.

cheers

Bruce

Josem

07-26-2007, 07:13 PM

[ QUOTE ]
Josem, a poker player does not use a "system" when betting, which is what the cases mean by systematic. Many variables affect the decision as to whether to bet in poker, your opponent, your position, the cards etc.I undertand what you are trying to say, but this is not what is meant by systematic when reference is made to the cases in my view.

[/ QUOTE ]

I still disagree with you.

I think that developing significantly sized computer databases, extensive hand analysis and review (hello 2p2), regular playing patterns, data mining, good table selection, are all parts of a systematic way of playing the game.

I think that using a number of variables to make your bet is precisely what makes professional poker playing systematic.

The horse example that you use is of an expert punter who takes the many variables - track condition, horse form, jockey form, forecast weather, trainer preparations, etc., - to make a +EV bet. This is exactly analogous to a poker player using the incomplete information available to him to make a bet. Clearly, a horse punter also has incomplete information - he doesn't know if the jockey just tripped and hurt himself that morning, he doesn't know if the horse is going to scratch himself on the stalls, he doesn't know if a seagull is going to scare the horses.

[ QUOTE ]
Reading between the lines of the cases it appears that the system seemed to be able to affect the consequent odds offered, to the extent that the chance factor was almost eliminated.

[/ QUOTE ]
Clearly, it is not possible for a mere punter to change the likelihood of a particular horse winning - if that is happening, that's called fixing races, and I assume that is illegal in itself.

What they can do is to adjust the market to the extent that they are able to fiddle the odds that are offered - just like a good poker player. They obviously can't change the odds of their hand winning (in a literal sense, except through bluffing and other moves, which is further evidence that there is skill in this game), but they can change the odds that they are paid.

Presumably, there's a consensus amongst people on this board that poker is a game of skill. If poker is a game of skill, it follows that there is a systemic way of analysing the decisions (hello EV, hello ICM, hello theory of poker) and making +EV decisions.

[ QUOTE ]
This fact is what is likely to tip the court, as in the horse racing case (which set the precedent for aussie case law) the punter not only had business premises and was very close to the bookies, but had intimate knowledge of the industry. The way he bet was systematic.

[/ QUOTE ]

There are many businesses run from home. A player playing at home, who has a PC, presumably has "business presmises."

In addition, I would assume that a poker player would have an intimate knowledge of this industry.

You also comment on the way the gambler bet as being systematic.

Presumably, when you play poker, you are not randomly throwing money into the pot (if you are, PM for home game details). You are using a thought process on how to place a bet. This is systematic.

[ QUOTE ]
In the greyhound case he owned dogs and would place bets on behalf of others, his whole life revolved around the industry. Again, his betting virtually eliminated chance as a factor in the outcome, due to his superior industry knowledge.

[/ QUOTE ]
Datamining is the equivalent of this.

[ QUOTE ]
So systematic is more a reference to both betting patterns and also how the enterprise is conducted, ie in a business premises, with employees, etc.

[/ QUOTE ]
I still think that a professional poker player plays poker predominantly systematically (look at that alliteration).

[ QUOTE ]
In fact, looking at the detail of some of the judgements, the fact that cards are random makes it very unlikey in my view the courts would ever rule poker to be a game that eliminates chance as a factor.

[/ QUOTE ]
Clearly, chance is a factor. Clearly, however, in the horse racing example, there was still chance in which horse won. If not, it seems self-evident that:
a) bookmakers would stop taking his bets
and
b) if he had 100% success rate the whole industry would be over

[ QUOTE ]
cheers

Bruce

[/ QUOTE ]
While I obviously disagree with you, I appreciate that this is actually a mature discussion on these boards and that we can actually discuss this stuff as adults.

party on,
Mick

Poker CPA

07-27-2007, 12:26 PM

Josem;

How does an auditor determine your point of "that developing significantly sized computer databases, extensive hand analysis and review (hello 2p2), regular playing patterns, data mining, good table selection, are all parts of a systematic way of playing the game."

And your comment "I think that using a number of variables to make your bet is precisely what makes professional poker playing systematic.", could apply to any poker player.

An ATO case is based on facts and circumstances. How is he going to find the "data mining", the 2 + 2 information, databases, table selection, etc etc. He has to build a case. How does he do it, from a practical standpoint. He can't, unless the player (or his rep) lays it out completely for him. After hearing "I got lucky playing poker online", what is the auditor going to do to determine this player's "system". I understand your point but its not a "real life" situation.

vilemerchant

07-28-2007, 05:21 PM

I think the 'business test' is very important and in our favour. Clearly, if the ATO want to rule that winning poker players are entrepeneurs operating a business for profit, they would also have to rule that losing players are operating a loss-making business. Just imagine if a highly succesful businessman who donks off a lot of money online could claim his losses as a tax deduction for his overall 'business'.

That said, there's also no reason at all to make any noise that might bring you to the ATO's attention. IF they see all your money with no declared income they will likely be asking where it came from. Maybe it's better if they don't see a lot of that money and then maybe don't ask about it..

I also agree with the advice of keeping your cashouts large and every few months rather than your bank account appearing like you're drawing a 'weekly wage'. There are also cashout methods which avoid your bank account altogether, and there's no law against paying your living expenses in cash. Just be prepared to fully and truthfully explain yourself if the time comes.

Josem

07-28-2007, 08:40 PM

[ QUOTE ]
I think the 'business test' is very important and in our favour. Clearly, if the ATO want to rule that winning poker players are entrepeneurs operating a business for profit, they would also have to rule that losing players are operating a loss-making business. Just imagine if a highly succesful businessman who donks off a lot of money online could claim his losses as a tax deduction for his overall 'business'.

[/ QUOTE ]

Sure, there are other public policy issues here - but I suspect that losing gamblers, who only play recreationally, will, by definition, not be able to claim that their poker is a business.

There is a fairly clear track record of people losing court cases in that effort.

[ QUOTE ]
That said, there's also no reason at all to make any noise that might bring you to the ATO's attention. IF they see all your money with no declared income they will likely be asking where it came from. Maybe it's better if they don't see a lot of that money and then maybe don't ask about it..

[/ QUOTE ]

What's this? The Glenn Wheatley school of tax advice?

[ QUOTE ]
I also agree with the advice of keeping your cashouts large and every few months rather than your bank account appearing like you're drawing a 'weekly wage'. There are also cashout methods which avoid your bank account altogether, and there's no law against paying your living expenses in cash. Just be prepared to fully and truthfully explain yourself if the time comes.

[/ QUOTE ]

The goal of this discussion is to not avoid an audit. The purpose of this discussion is to determine whether people have a tax liability.

While some people may be able to hide themselves, others:

a) can't

and

b) don't want to

If I were to ever play full-time, I don't want to be breaking the law. I want to abide by it, because that has other consequences for my options down the track.

stevoL

08-01-2007, 07:57 AM

great discussion guys...man so I read all that and still dont know we I/we stand...my dad used work in the ATO and just had a big debate with him, I was kinda debating and from the standpoint Josem is here...things do look positive for us, but it doesnt pay to be ignorant abotu something, and I know for that I dont want to intentionally hide

I play fulltime and dont know what to do really, Im quite happy to not pay tax obv if thats the case, but its always best to find out everything, whats the next step to finding more information, a tax lawyer mayb, or waste of money? blah

keep the discusion alive!

stevoL

08-01-2007, 08:09 AM

ok read a bit more, is this 'Evans' case the famous case ppl are talking about?...if thats goign to set a precedent then we are fine, because as phil mentioned - unless the ATO can take our computers and see we're using pokertracker etc there is jsut no way of them knowing we are betting systematically and operating as a 'business', they cant dig into our thought processes and disguinush between us and some lucky donk winning can they?

I think my mind is kinda at ease for a little while at least

Josem

08-01-2007, 08:12 AM

[ QUOTE ]
whats the next step to finding more information, a tax lawyer mayb, or waste of money?

[/ QUOTE ]

for your own personal situation, i'd strongly suggest that you consult a professional. while people on these boards are convincing, they (including myself) are essentially anonymous posters on a discussion board.

apart from anything else, if you do make a decision on the basis of the advice of a professional, you might be able to have a stronger defence if you get into trouble.

for the broader situation, there will eventually be a court case (or, theoretically, legislation, although this is politically unlikely) on this issue which will provide further guidance.

in the meantime, you have to estimate where you fall on the balance of the six tests highlighted above. i suspect most professionals will fall afoul of it; others suspect not. either way, your individual circumstances are likely to have a huge impact. for example, if you're also receiving a chunk of income from being a RB affiliate, you're massively more likely to be considered a business. if you don't use pokertracker, you're less likely to be keeping the records expected of a business, and so on.

this is not taxation and/or legal advice. see an accountant and/or lawyer if you want some