Poker pro Jonathan Duhamel caught up in Canadian tax dispute involving poker play

After seeing success in the game of poker for more than a decade, Jonathan Duhamel is now fighting a legal battle with the Canada Revenue Agency (CRA) over his poker winnings. Duhamel won the World Series of Poker back in 2010, taking home $8.9 million. Over the years, he has continued to earn a living as a poker player. The CRA are trying to obtain taxes on the winnings of Duhamel, including what he earned in 2010.

The agency says the poker pro owes $1.2 million in unpaid taxes, stemming from 2010 to 2012. If the agency wins the court battle, Revenu Quebec might try to take taxes as well, which could put the pro out just over $2 million.

Does the CRA Have a Legal Claim?

In Canada, winnings from games like poker are not taxable. In the United States, they are. When Duhamel won the WSOP, he paid some taxes in the US. However, a Canadian resident who has a business must pay taxes on the profits, no matter what type of business is in operation.

For the CRA, they consider Duhamel’s poker playing as his business. He is a professional poker player and derives and income from the game. So, they feel he should pay taxes on what he wins. Duhamel plays poker all over the world and spends a lot of time on the game, but is it really a business? The Tax Court of Canada will hear the case in March and make that determination.

The CRA argues that Duhamel operated a business for at least three years, from 2010 to 2012. They say he took the game seriously and his long-term success in the game depended on his skill and talent. The CRA claims he behaves like a ‘serious businessman’ when he is playing the game and since 2008, his only occupation has been playing poker.

The case also points out that Duhamel plays online poker 40 to 50 hours a week and during tournaments, he works with investors to minimize his risk of losses via swap agreements. They point out in 2010, during the WSOP, he paid $4.1 million to other people and earned $4.8 million on his $8.9 million win, with the swap agreements being tax-deductible.

Duhamel Disgrees

For the poker pro, he disagrees. He says that he won the WSOP due to chance and he never received any specific training in poker. Duhamel also argues that his win in the WSOP gave him notoriety and he qualified as a professional poker player which helped him with marketing purposes, such as encouraging other players to play at PokerStars, but the game still remains one of chance.