The former world champion Jonathan Duhamel made an astonishing confession on the first day of the hearing of his dispute with the tax authorities: he has not played poker for three years. He says he quit because he feared losing the rest of his millions he earned early in his poker career, especially when he won the World Series in 2010.
“I hardly play anymore. I still have some investment income. Before I lost everything, I almost stopped playing. I play about five times a year recreationally, but that’s it, ”Jonathan Duhamel told the Tax Court of Canada. He explained that he stopped playing poker for two reasons. “I lost a lot of money [des millions de dollars] in 2013 and 2014. I also had my children, which led me to review my priorities. ”
Eleven years after his World Series victory, Jonathan Duhamel finds himself in dispute with the Canada Revenue Agency over whether he will have to pay taxes in Canada on his poker winnings, particularly on his gain of US $ 8.9 million. at the World Series in 2010.
Mr. Duhamel, who lives in the greater Montreal area, believes he should not pay tax on his poker winnings since they are winnings from a game of chance. This type of income is not taxable under Canadian tax laws. Mr. Duhamel has always considered poker to be a hobby, a passion that gives him “adrenaline”. “My goal is to have fun, have a good time,” he says.
But the Canada Revenue Agency (CRA) estimates that Mr. Duhamel was operating a business as a professional poker player as of 2010. She is claiming about $ 1.0 million in federal taxes from him over three years. Revenu Québec could claim a similar sum if Mr. Duhamel loses his case against the federal tax authorities.
Mr. Duhamel, who said Monday that he had no occupation, said he lived on his investment income from the sums he won at poker. He amassed an actual gain of US $ 4.8 million (30% before US taxes) in the World Series in 2010.
From 2011 to 2018, his net poker winnings were still around C $ 0.9 million, mainly because he won $ 2.4 million in 2015 in a tournament benefiting the One Drop Foundation of Guy Laliberté.
The “luckiest” champion
During his testimony, Jonathan Duhamel described himself as the “luckiest” champion in the history of the World Series of Poker in Las Vegas.
He recalled his victory in the World Series in 2010. In particular a hand in the semi-finals, where he had bet everything in a duel when he had only a 21% chance of winning this hand. The Quebec player needed an 8 of diamonds on the last card of the hand. He got it and took an insurmountable lead over the other 14 finalists. “I was extremely lucky,” he says. I really didn’t deserve it. ”
He never came close to repeating his feat of 2010, he recalls. From 2011 to 2018, he only managed twice to rank in the top 1000 players of the World Series (409e in 2018 and 565e in 2015), which enabled him to receive part of the purses reserved for the 15% of the best players in the tournament. The other six years he was quickly eliminated and lost his US $ 10,000 entry fee.
“I could try to make myself believe that I am the best, but in reality, it has to come to the reality: I was lucky when I had to. I accept my fate, ”says Duhamel.
54% of the $ 8.9 million prize pool
The first day of hearing of this litigation gave rise to several revelations on the world of professional poker.
First, Jonathan Duhamel didn’t really win $ 8.9 million at the World Series in 2010.
Yes, he was the one who cashed the check on TV. But before the start of the tournament, Jonathan Duhamel and a dozen Quebec players (they all lived in the same rented house) decided to cover their risks. They verbally exchanged stakes in their future tournament profits (“swap” deals, in poker parlance). Even before his first hand of the tournament, Jonathan Duhamel had traded 46% of his eventual profits.
Of his gain of US $ 8.9 million, he paid them US $ 4.1 million and retained his share of US $ 4.8 million. He paid 30% US taxes on the latter sum.
“No fun to play” online
Another astonishing revelation: Jonathan Duhamel, sponsored for five years by the online poker site PokerStars, did not like playing online poker. “I was wasting all the time online. I had no fun playing, ”he says.
His sponsorship with PokerStars brought him $ 1 million in 2011, then less for the next four years (he has always paid his sponsorship taxes, which are not the subject of the dispute). In PokerStars online tournaments, he lost about $ 114,000 in five years (excluding his sponsorships). He hasn’t played online since 2015.
The hearing in the Tax Court of Canada continues this week.