Inside Straight: News

Governments Take Huge Bite Out of WSOP Final-Table Prize Pool
Final Nine Collectively Owe About $14.7 Million in Taxes
By Bob Pajich

The tax monsters that help feed governments from all around the globe feasted heavily on the World Series of Poker main-event final-table participants. Out of the $32,731,585 prize pool that was distributed to the final nine players, $14,793,416 went to governments from around the world.

Russ Fox, an enrolled accountant who works for Clayton Financial and Tax of Irvine, California, crunched the tax numbers for all of the final-table participants. The following is his work, which can be found on his blog at www.taxabletalk.com (his figures assume that the players will owe exactly what regional tax law calls for).

By far, the person experiencing the most tax pain is the winner of the main event, Peter Eastgate. Denmark puts a severe tax burden on those who win big at casinos: 45 percent on the first 4 million Danish kroners won, 75 percent on anything above that. A dollar is worth about 5.8 kroners, meaning Eastgate's $9.1 million first-place prize falls easily into the higher rate.

Assuming Eastgate is subject to Danish taxation laws, he is looking at a tax bill of around $6.6 million. But Eastgate recently moved to London, and because of that, he may not owe a penny. The UK doesn't tax poker winnings, but it's a near certainty that Denmark will go after the massive amount of kroners, since Eastgate moved only months ago.

Second-place WSOP finisher Ivan Demidov won $5.8 million, and thanks to a Russian flat tax rate of 13 percent, he gets off fairly cheap, with a $755,247 tax bill.

Dennis Phillips, of Illinois, finished third and won $4.5 million. He will owe about $1.6 million to the IRS and $135,000 to the Illinois Department of Revenue.

Another American, Ylon Schwartz of Brooklyn, finished fourth and won $3.7 million. According to Fox, since he is a professional gambler, he'll owe self-employment taxes on his winnings, as well as state and New York City income tax. His bill: $1.39 million to the IRS and $387,966 total to New York City and the state of New York.

Two Canadians finished fifth and sixth: Scott Montgomery of Perth, Ontario, and Darus Suharto of Toronto. The tax treaty between the U.S. and Canada calls for 30 percent of the prize money to be withheld by the IRS.

That puts Montgomery's IRS bill at $929,000 (for winning $3,096,768) and Suharto's at $725,569 (for winning $2,418,562). Montgomery will owe about $491,000 more to his provincial government, and Suharto, because he is an amateur player, may be entitled to a full refund through Canada.

Finishing seventh and eighth were two Californians. They not only will get a bill from the IRS, but also from California's tax agency, the Franchise Tax Board (FTB). David Rheem earned about $1.7 million for his seventh-place finish, and will owe about $651,262 to the IRS and $170,302 to the FTB. Kelly Kim finished in eighth place, and owes about $470,995 to the IRS and $121,074 to the FTB.

Craig Marquis took a rotten beat to be eliminated first, and earned $900,670, of which $328,911 will go to the IRS.

A Lot of Money

With $600 out of every $10,000 World Series of Poker main-event buy-in going to Harrah's this year, the casino giant collected enough rake in that event alone to have finished in the top four places: $4,106,400. Only the accountants know how much the casino giant got to keep after it paid its taxes, staff, and air-conditioning bill this summer.

Kentucky Domain Case Attracts Attention From ACLU
Case Could Be Decided This Month
By Bob Pajich

As expected, Kentucky's attempt at seizing 141 domain names related to online gambling and poker has become increasingly complicated, and is attracting interest from parties that have nothing to do with the online betting and poker industry.

The ACLU's Kentucky branch and the Center for Democracy and Technology joined the online commerce and gambling trade organizations Interactive Media Entertainment and Gaming Association (iMEGA) and the Interactive Gaming Council (IGC) in filing amicus briefs for an appeals court. The Poker Players Alliance also has filed briefs with the courts.

The commonwealth is attempting to use a law that allows officials to seize devices used to gamble illegally to seize poker and casino domain names globally. According to an attorney for the IGC, which represents more than 50 of the companies facing seizure, Kentucky doesn't want the domains.

It wants the companies listed, which include those associated with Full Tilt Poker, Doyles Room, PokerStars, BodogLife, Ultimate Bet, Absolute Poker, Cake Poker, and the MicroGaming Network, to stop doing business with Kentuckians and also pay it and its attorneys $1 billion collectively.

Kentucky attorneys convinced a judge to sign the seizure order in a closed-court session in September. An appeals process has been taking place since then, and dozens of the targeted sites are asking for a three-panel appeals court to overturn the original judge's decision.

MicroGaming already has stopped doing business with Kentuckians after a judge told the sites that they will not owe the commonwealth anything if they prevent Kentuckians from accessing their domains by the forfeiture hearing. Despite this, Kentucky attorneys are attempting to force the companies to make payments and also have sit-down interviews with the sites' top management members.

The appeals court was expected to rule on Dec. 12, and the forfeiture hearing, which has been delayed twice already, will take place in the days following, unless another delay is granted.

San Diego's Valley View Casino Introducing Automated Tables
Dec. 19 is Opening Day
By Bob Pajich

Valley View Casino near San Diego will jump directly into the 21st century when it opens its new poker room featuring six PokerPro automated poker tables on Friday, Dec. 19.

The poker room is part of Valley View Casino's new 25,000-square-foot nonsmoking casino addition. The room is the first of its kind in San Diego County.

The new poker room, named "Poker at the View," will also feature a $1 million bad-beat jackpot that's exclusive to Valley View Casino. The $1 million jackpot will be awarded to a player with four sixes when an opposing player's hand is a royal flush.

The new tables will have the capability of offering various live poker games and daily buy-in tournaments and weekly freerolls.

For more information regarding the new poker room at Valley View Casino, please call 1-866-VIEW-WIN or go to valleyviewcasino.com.