[Russ Fox]

[ QUOTE ]
Can somebody please explain why if I earn a living playing chess or bridge it is not treated as gambling income, but poker is?

Or am I mistaken about how income from chess and bridge is treated?

Do we need to stop referring to our winnings as gambling income?

[/ QUOTE ]

This is an extremely important question. And it goes to the heart of a major issue relating to making poker a "skill game."

Under Tax Law, poker is considered a wagering activity. This is akin to gambling. The Tax Court has consistently ruled this way, and this has never been overturned by a Court of Appeals. The Tax Court most recently ruled on this issue in Tschetschot v. Commissioner, where they concluded:

"That said, the Tax Court is not free to rewrite the Internal Revenue Code and regulations. We are bound by the law as it currently exists, and we are without the ability to speculate on what it should be. Accordingly, we hold that tournament poker is a wagering activity subject to the limitations of section 165(d)." (While this decision related to tournament poker, previous decisions have classified poker as a wagering (gambling) activity.)

It will take an act of Congress to change the classification of poker for tax purposes.

Chess and bridge are not considered wagering activities.

-- Russ Fox