[binions]

This ruling will severely hurt tournament poker.

Players with winnings early in the year will be less inclined to play more tournaments if they have already paid taxes on the winnings than if they can justify the next entry fee as, at worst, a write-off.

I understand that players will be able to file for refunds. But let's see how many audits there are when a gambler seeks $30K+ in refunds from the IRS for gambling losses that equal withholding. Let's see how closely the IRS will scrutinize your records of cash game losses in determining whether to pay a refund.

As noted above, the impications for satellites and rebuys is horrible.

And it is unclear to me whether the rule applies to American players in online tournaments. Arguably, it does.

It may drive some tournament donks back into cash games. That's about the only benefit I can see from the rule. But I expect the WSOP fields to be smaller as a result of the rule.

The folly of the rule, as it applies to pros who pay taxes quarterly, pay self-employment taxes, and net wins against losses and expenses, is that tournament winnings are not income. They are revenue. Every other business owner gets to net his expenses against his revenues, and pay taxes on the profit. Here, the revenues are getting taxed as de facto income.