[sawseech]

1. Distinguishing Between Business and Hobby

· A hobby may give rise to receipts, but these will not be taxable.

· To be a business, at least the following elements are required; otherwise it may be a hobby:

(a) Time, labour, organization;

(b) Reasonable expectation of profit; and

(c) Regular, recurring receipts.

time means regular hours; playing when you "feel like it" does not count
labour means concerted _definably skilled_ effort in a _trade_.
poker has not been classified as a trade in canada.
organization means you need to instigate the moneymaking ie solicit, house, administrate. firing up pokerstars does not count.

reasonable expectation of profit means from an outsider's view, can you be reasonably be expected to win, not whether or not YOU expect to win. tyson was reasonably expected to win vs that fat white guy in his comeback fight. every time i sit down at a table i lose 46% of the time. i can lose 20 mtts in a row. i can lose 20 buyins over 10k hands.

regular recurring receipts follows from organized effort from dedicated time. see above.

now, let me be clear on what constitutes "organizing effort"
having a PT database is not organizing effort; we as hobbyists maintained thorough databases and analyze player actions, timings, weaknesses etc.
this is analagous to a sportsbettor or a birdwatcher.

now, MNR v Morden is the applicable precedent. Morden owned a stable, and bet on horseracing. he had done this for 20 years, assessing his and his opponents' stables, putting jockeys on specific horses in specific situations, anaylzing the weaknesses of specific jockey's on other horses. he then claimed that his betting winnings were not taxable:


(a) Time, labour, organization;

[x] owns and operates a stable. [x] has done so for 20 years. [x] GG.

(b) Reasonable expectation of profit;

[x] expert on horses. [x] expert on jockeys. [x] expert on wagering systems and calulating marginal outcomes based on lines.

(c) Regular, recurring receipts.

[x] never loses and always wins.

running an underground poker game and maintaining books and playing in it is organizing effort

playing in poker tournaments is not

joining a team of poker players and playing on a shared bankroll and exchanging tactics, knowledge about the opposition, arranging to sit together in the same games, entering no-loss arrangements with each other, exchanging equity in tournaments, colluding; altogether this is organizing effort

playing on a shared bankroll and exchanging knowledge is not nor is sitting in the same games (this in fact hurts your equity unless you collude in which case you'll get caught one day and zero'd)

MNR vs Morden is the only applicable precedent and it does not apply to a poker player unless they run a continually running home game and are a provable expert.

if they apply MNR vs Morden to a simgle poker player, then all gambling losses are deductible (hospital lotteries, lottery tickets), just as all gambling winnings are income. all registered gambling entities in canada would then need to issue receipts, for everything.

firing up pokerstars is not organizing effort.

//

things that should concern a winning player:

being part owner or an operator of a major poker site/affilate/publication
being sponsored by a major site
winning a major tournament, and then winning another one, and then writing detailed articles for a major poker publication which demonstrate considerable expertise while also showing no legit income.
being involved in fed indictable criminal activities (drugs, washing)