Canadian legislation

[Superflush]

Does anyone know what the current Canadian laws are regarding depositing money into Poker sites? Have there been any discussions by the Canadian government?

[small rage]

I only withdraw, and that's totally legal.

[1C5]

It is legal.

The more valid question is how long before Canada follows the US and bans it? /images/graemlins/smirk.gif

[Mossberg]

[ QUOTE ]
It is legal.

The more valid question is how long before Canada follows the US and bans it? /images/graemlins/smirk.gif

[/ QUOTE ]

Seriously? I can't picture our government passing a law to make online poker illegal - With the US on the other hand, it really wasn't any surprise to me at all.

[DavidNB]

There is no legislation dealing with on line poker in Canada. Its a grey area thats never been addressed and hopefully never will be. I wouldn't worry about, I seem to recall someone quoting the PC governement as saying there are better things to deal with.

The US governement and country are much more to the right as compare to Canada

[Botchman]

[ QUOTE ]
It is legal.

The more valid question is how long before Canada follows the US and bans it? /images/graemlins/smirk.gif

[/ QUOTE ]

Canadas laws resemble the UK's laws way more than American laws

[big e]

Most license eg party ect. are licensed in Kahnawake Mohawk Territory (Quebec/Canada)

Quote.
Partypoker poker gaming servers located in the Mohawk Territory of Kahnawake. In addition to its Gibraltar gaming licence, PartyGaming holds a secondary gaming licence issued by the Kahnawake Gaming Commission.


The Kahnawake Gaming Law was enacted in 1996 by the Kahnawake Mohawk Council to permit online gaming operators to be licensed in the Kahnawake Mohawk Territory, an Indian reserve.

Last time the gov acted against the Kahnawake tribe several tribe members were killed since then the Canadian gov have gone to great lengths to avoid any conflicts with them. This is a can of worms the Canadian gov doesn't want to open any time soon.

[_Towelie_]

[ QUOTE ]
It is legal.

The more valid question is how long before Canada follows the US and bans it? /images/graemlins/smirk.gif

[/ QUOTE ]

Erm yea... that's likely to happen lol. I'm not so arrogant as to say that Canada won't ever try to legislate or regulate online gaming, but it certainly won't be because they feel a need to 'follow the US'.

[Hock_]

Neteller is also a Canadian company. I believe FTP and Stars are licensed by the same tribe, though I'm not positive.

[TorontoCFE]

Actually, the RCMP and at least one Minister has said that they consider online poker illegal.
They just aren't prepared to do anything about it yet, probably becuase they would be on shaky legal ground.

[SpicFaLife]

TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[DonJ]

[ QUOTE ]
TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[/ QUOTE ]

I would say the lawmakers are completely ignorant and would lose to appeal. Poker is no more a game of chance than chess is a game of chance. The game of poker just takes longer to prove itself out.

How the heck do you draw a connection of a rediculous British court ruling to Canadian tax law?!!

[TheJokerIsWild]

[ QUOTE ]
[ QUOTE ]
TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[/ QUOTE ]

I would say the lawmakers are completely ignorant and would lose to appeal. Poker is no more a game of chance than chess is a game of chance. The game of poker just takes longer to prove itself out.

How the heck do you draw a connection of a rediculous British court ruling to Canadian tax law?!!

[/ QUOTE ]


Well, I definitely don't agree that poker is the same as chess. There is ZERO luck involved in chess.

[MikeyPatriot]

[ QUOTE ]
[ QUOTE ]
TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[/ QUOTE ]

I would say the lawmakers are completely ignorant and would lose to appeal. Poker is no more a game of chance than chess is a game of chance. The game of poker just takes longer to prove itself out.

How the heck do you draw a connection of a rediculous British court ruling to Canadian tax law?!!

[/ QUOTE ]

Yeah, you don't get random pieces in a chess match.

[Pog0]

[ QUOTE ]
TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[/ QUOTE ]

If Canada does the same thing, then poker winnings will be tax free under the windfall clause.

[Jooka]

[ QUOTE ]
Poker is no more a game of chance than chess is a game of chance.

[/ QUOTE ]


this is funny no matter how many times I read it. This argument only works for winners. Losers wont argue the same case. Chance is involved in every hand of poker, just because you play better than the next guy doesnt mean [censored] when they look for skill/luck comparison.

[DavidNB]

in the short term poker has more luck to it but long term poker is a game of skill. A new player could own a pro on any given night, but put the same players against each other nite after nite and the pro would always come out on top over the long run.

[jonnycanada]

It's not "legal". It is an unknown. Gambling outside of licensed casinos with a house rake is illegal. The question is where is internet gambling taking place? Location of server or location of player?

In order to ban it, they would have to arrest someone and hear the issue in court, or enact legislation specifically addressing it.

The government is not into spending the time, energy and cash to try and catch an online poker player, when it isn't even certain they are breaking a law. So under existing law and circumstances, it is unlikely to be heard in the courts.

Further, I whole heartedly agree with big e, that the relations with the First Nations is a huge deterent for the Canadian government to legislate against it.

[jjshabado]

[ QUOTE ]
[ QUOTE ]
TorontoCFE,

as someone mentioned above Canadian law resembles UK law more than american law. What do you make of the recent UK court decision that pronounced poker a game of chance, not of skill? with regards to tax implications for Canadians.

[/ QUOTE ]

I would say the lawmakers are completely ignorant and would lose to appeal. Poker is no more a game of chance than chess is a game of chance. The game of poker just takes longer to prove itself out.

How the heck do you draw a connection of a rediculous British court ruling to Canadian tax law?!!

[/ QUOTE ]

There was another thread where somebody talked about how the UK ruling would set a precedent for Canada. Some people think we're still a colony.

As in interesting tidbit the other day (ok maybe like a year ago) I found the requirements for registering a .ca web domain. Being the Queen (and maybe any member of the Royal Family) is one possible way to be allowed to register a .ca domain.

I thought it was funny.

[TorontoCFE]

I don't see any changes.

Since poker can technically be taxable to a few (likely the biggest longterm winners), the government would rather call it a game of skil and thus taxable to at least some vs a game of chance and taxable to none.

Canada would more likely follow the UK common law but faces pressure from the US so it is tough to say.

It is odd because there are a lot of people in CRA trying to figure out how to get their hands on a portion of the gaming action and they don't know how to proceed, whether to grab some tax cash at the expense of long court challenges and admin effort and whether to legitimize the industry to make taxation easier but risk offending allies and open the flood gates to more gaming.

The government has a constant dilemma that McGuinty talked about. They would rather there be no legal gaming of any kind but they are addicted to the tax revenue.

I see notihng changing, but then my ears perked up when I read the government taking a strong psoition. That may mean action coming because we all know the governments don't commit to anything unless they have to.

[jjshabado]

[ QUOTE ]

As in interesting tidbit the other day (ok maybe like a year ago) I found the requirements for registering a .ca web domain. Being the Queen (and maybe any member of the Royal Family) is one possible way to be allowed to register a .ca domain.

I thought it was funny.

[/ QUOTE ]
Section 2.1(m) (http://www.cira.ca/en/documents/2006/q3/GeneralRegistrationRules.pdf)

I still think its hilarious.

[Pog0]

[ QUOTE ]
poker can technically be taxable to a few (likely the biggest longterm winners)

[/ QUOTE ]

Is this based on a subjective interpretation of the word 'reasonable' in 'reasonable expectation of profit'?

I've been winning for a year and a half now, so what claim, if any, could I make to not paying taxes on poker winnings?

[Superflush]

[ QUOTE ]
Is this based on a subjective interpretation of the word 'reasonable' in 'reasonable expectation of profit'?

I've been winning for a year and a half now, so what claim, if any, could I make to not paying taxes on poker winnings?

[/ QUOTE ]

If you are just making money on poker recreationally (in Canada) then your winnings are not taxable. But if you are making money on poker for a living, then this can viewed as self employment income and all your winnings would be taxable. Similarily, if you're now subject to income taxes, you're also able to deduct all your expenses against this income (travel, buy-in fees, sharkscope, ect.). As long as there was a 'reasonable expectation of profit' from incurring the expense, it would be deductible against your income.

[Pog0]

[ QUOTE ]
[ QUOTE ]
Is this based on a subjective interpretation of the word 'reasonable' in 'reasonable expectation of profit'?

I've been winning for a year and a half now, so what claim, if any, could I make to not paying taxes on poker winnings?

[/ QUOTE ]

If you are just making money on poker recreationally (in Canada) then your winnings are not taxable. But if you are making money on poker for a living, then this can viewed as self employment income and all your winnings would be taxable. Similarily, if you're now subject to income taxes, you're also able to deduct all your expenses against this income (travel, buy-in fees, sharkscope, ect.). As long as there was a 'reasonable expectation of profit' from incurring the expense, it would be deductible against your income.

[/ QUOTE ]

See, now I very well know that I have a reasonable expectation of profit, but that's irrelevant. What's relevant is whether the government would allow the explanation that I didn't have a reasonable expectation of profit.

[TorontoCFE]

It is whether you are in the business of poker that is the issue.

A business can be full or part time.
If the government thought that you were in the poker business, then you would have to prove that you had no special skill or knowledge giving you a better chance of sucess than mere luck would dictate and that you approached the game for some other reason than just to make money.
Not necessarily hard to prove your case, but can be tricky if you are shownto be a consistent winner.

[pyedog]

So as someone who enjoys gambling, isn't it a better bet to just not pay taxes on poker winnings and then put the onus on the government to prove that we have to pay taxes on poker and to somehow prove in court that we have a "reasonable expecatation of profit". That term is so vague. Yes I've never had a losing month in the past two years. However tonight I could win $1K or I could lose $1K and I honestly have no idea which one it will be. I think that winning is more likely but I'm not sure how reasonable of an expectation of profit that it is. If I do win then I feel that I'll have to get extremely lucky to do so.

How severe would the penalty be for not paying taxes on something that is pretty debatable to begin with? The CRA wouldn't send someone to prison for not paying taxes on something that is arguably a windfall would they? Or does the fact that someone got lucky and won $100K playing poker while unemployed make them liable for large fines or imprisonment?

I know that nobody would suggest committing a crime, but paying taxes on poker winnings in Canada seems so debatable, unlike US laws which are clear cut. It seems to me that the better approach is to just gamble and not pay them and put the onus on the government to prove that we had a "reasonable expectation of profit" after the fact, whatever that means. Won't they just make you pay the missing taxes anyways, plus some interest on top of that? I don't know anything about tax laws so I'm just speculating.

[Hock_]

[ QUOTE ]
I see notihng changing, but then my ears perked up when I read the government taking a strong psoition.

[/ QUOTE ]

What are you referring to here?

[TorontoCFE]

You would be unlikely to go to jail over an issue that is open to some interpretation.
Likely you would be (if found guilty in tax court) required to pay the amount of tax due plus interest. They may go after a fine equal to the amount of tax not paid (thus you would pay double the tax) but that is the max without there being a deliberate attempt to evade taxes, which it wouldn't be in this case since you can say you honestly thought they weren't due.

The question then is whether you want to risk having to cough up double the tax, plus interest plus legal fees in the extremely unlikely event you are targeted.

Only each person can answer that for themselves.
I just tell people what the law says.

There are many many cases on reasonable expectation of profit being defined (though not in gaming). It's not
really that much a grey area to lawyers and accountants- the government calls this an issue of fact - you look at the case and each of the factors so see what side they balance on - there is no issue of law - that part is clear cut.

[TorontoCFE]

There was a story on TV and in a magazine about the ramifications of the US law about 3 weeks ago. The RCMP and a Minister (AG probably) both stated categorically that their position was that internet gaming was illegal.
My memory is fuzzy on exactly where this was but I will check to see if I can find it.

[pyedog]

Thanks a lot for the information TorontoCFE. I appreciate the time that you spend to respond to these tax and legislation threads.

[Mossberg]

[ QUOTE ]
There was a story on TV and in a magazine about the ramifications of the US law about 3 weeks ago. The RCMP and a Minister (AG probably) both stated categorically that their position was that internet gaming was illegal.
My memory is fuzzy on exactly where this was but I will check to see if I can find it.

[/ QUOTE ]

The great thing about Canada is that even if they see it as "illegal", it will almost certainly go completely unenforced and basically unmentioned.

[TorontoCFE]

probably - but hearing them bring it up at all concerns me.

Though it is probably just as likely they end up fully legalizing it as a Crown corporation

[big e]

[ QUOTE ]
[ QUOTE ]
There was a story on TV and in a magazine about the ramifications of the US law about 3 weeks ago. The RCMP and a Minister (AG probably) both stated categorically that their position was that internet gaming was illegal.
My memory is fuzzy on exactly where this was but I will check to see if I can find it.

[/ QUOTE ]

The great thing about Canada is that even if they see it as "illegal", it will almost certainly go completely unenforced and basically unmentioned.

[/ QUOTE ]

This is not completely true.

Here's an example of a B&M game that was raided.
Currently I have not heard of any one arrested for poker on the internet (probably due to the Native Tribes Licensing Issues) but they do regularly bust up B&M games. There was also another incident of this last year in Toronto but I couldn't find the press article.

here's the link

Police bust 68 and charge 'em in Ottawa poker raids (http://www.cbc.ca/canada/toronto/story/2006/10/12/poker-bust.html)

Police arrested 68 people. Eight are charged with keeping a common gaming house, and 60 are charged with being found in a common gaming house. One man was also charged with two counts of possession of a prohibited weapon.