Quebec poker champion Jonathan Duhamel will not have to pay taxes on his poker winnings.
Posted at 8:00 a.m.
In 2010, Jonathan Duhamel won the main tournament of the World Series of Poker, which was held in Las Vegas. The 23-year-old was crowned world poker champion and pocketed 8.9 million US (about 11.5 million CAD)
Following his victory, the Canada Revenue Agency (CRA) claimed about $1 million in taxes from his earnings from 2010 to 2012, judging that he was carrying on a business through his poker gambling activities. A decision strongly contested by Mr. Duhamel.
Gambling is not taxed in Canada, unlike in the United States. The former world champion therefore believes that earnings from his poker gaming activities should not be included in the calculation of his income.
The Tax Court of Canada finally agreed with him on Tuesday. ” […] the Court finds, on a balance of probabilities, that Mr. Duhamel’s poker gaming activities are not carried on in a sufficiently commercial manner to constitute a source of business income for the purposes of the Act”, can we read in the jugement.
The net winnings from his poker gaming activities therefore do not have to be included in the calculation of his income, the Court ruled. If the CRA won in court, Revenu Québec could have decided to claim a similar amount from it.
“I am very happy with the results for my client,” he told The Press Jonathan Duhamel’s lawyer, Yves Ouellette.
An “unpredictable and unstable” game
Jonathan Duhamel, now 34 years old, has demonstrated that the ability to produce a gain in the game of poker is “unpredictable and unstable”. Excluding the main tournament of the World Series of Poker in 2010 and the One Drop Foundation tournament in 2015, he had losses totaling more than $1 million from 2010 to 2018.
“The Court concludes, on a balance of probabilities, that Mr. Duhamel did not exercise his poker gambling activities in the same way as a serious businessman would have done”, notes the judgment, adding “that the poker game is a hobby or entertainment, which he plays out of a passion for the game and he had no intention of earning a living by playing poker”.
In November 2020, at the start of his tax litigation hearing, he admitted to quitting because he feared losing the rest of his millions earned early in his poker career. The many losses of money during tournaments and the birth of his children led him to review his priorities.