World Series Of Poker After Taxes – The Real Winner Of The 2015 Final Table

Date Created: Dec 10
Written by Gennaro Donnarumma

The annual World Series Of Poker had another successful season this summer as thousands of people came down to Las Vegas to take part in the full schedule of poker tournaments. With all the changes made to keep up with the trends and the millions of dollars in play, there was something for everyone and it all culminated with the WSOP Main Event.

After establishing itself as the biggest poker tournament of the year, the Main Event of the 2015 World Series of Poker kept the tradition going and stopped the play after the final table was determined so that the players would come back in November to determine the champion. The break was designed to allow the players to train better for facing the opponents after going through the field of thousands of other players while also giving time to the televised edition to catch up and create the needed hype.

In the end, it was Joe McKeehen who won the title along with the diamond bracelet and a paycheck of $7,683,346; not to mention the ultimate poker glory. While it was an exciting tournament and an intense final table, the biggest winner of the event was not actually McKeehen.

Without even playing one hand, the Internal Revenue Service (IRS) collected $8.4 million from the WSOP Main Event final table, making it the biggest prize to go in one location. This also puts it a significant $800k ahead of the listed top prize claimed by Joe McKeehen for actually winning the tournament. But of course, he is not going to keep that amount since taxes must be paid and they represent a huge percentage in this case.

Breaking down the 2015 WSOP final table

While taxation in the world of poker is a huge thing which covers the world and can come with big variations, using the final table of the 2015 WSOP is a great way to get an idea of how everything works since it represents the entire field in several ways.

First off, most of the 2015 November Nine players were from the United States. This is usually the case since US players also represent most of the field when the action starts so it is to be expected more often than not. This year saw a total of six Americans out of the nine who got to come back in November in front of the cameras.

The winner, Joe McKeehen is also an American and on his big prize, he had to pay a tax percentage of 44.07%; leaving him with $4,297,394. He bested a field of 6,420 players, which each paid $10,000 to take part in the event, and never lost the chip lead he started the final table with. McKeehen is a professional poker player and had to pay $3,073,240 for the federal income tax. In addition, $235,879 went Pennsylvania for the state income tax since this is where he resides, and then $76,833 went to the North wales Boro earned income tax for the local township.

Joshua Beckley came in second but since he is also from the United States, he had to pay a big part of the winnings in taxes. To be more precise, it was 46.56% on a prize of over $4.4 million to leaving him with $2,389,177 from the tournament.

In third place we have Neil Blumenfield who paid 46.86% in taxes to the IRS and got $1,805,764 from his prize of almost $3.4 million.

Out of all the Americans at the final table, Max Steinberg paid the smallest percentage on his winnings for fourth place, which were listed as $2,615,361 but ended up being $1,543,306 after taxes (40.99%) since Nevada doesn’t have a state income tax.

In fifth place we have Zvi Stern, the top non-American player at the Main Event this year. However, this doesn’t mean that he got to enjoy the full prize and actually ended paying a percentage of 47.09% on his winnings of over $1.9 million and will take home just $1,011,317. This is because Stern is from Israel and the tax treaty between the country and the US does no cover winnings from gambling. As a result, he loses a chunk representing 30% of the winnings to the IRS and then another part as gambling income taxes in Israel.

Thomas Cannuli finished in sixth place and he is registered as a professional gambler in New Jersey, USA so his total lost percentage comes down to 44.89% after paying the IRS fees and the self-employment tax. Out of his prize of $1.4 million, he will get to keep $785,996.

The second foreigner at the final table is Pierre Neuville, who came from Belgium. Not only was he the oldest player to ever make it to a WSOP Main Event final table at the age of 72, he is also the biggest winner this year when it comes to paying taxes. The Tax Treaty between the US and Belgium exempts all winnings from gambling from taxation in the US so Neuville doesn’t have to pay anything to the IRS. Furthermore, Belgium doesn’t have any taxes on winnings originated from gambling of amateurs so he doesn’t have to pay anything in his home country either. He gets to keep the full prize of $1,203, 293 and this actually puts him in fifth place if we consider after taxes winnings, despite the fact he was eliminated third from the table.

In eighth place, Federico Butteroni, came from Italy to take part in the poker tournament and he only got to play two hands this November before he was eliminated. While the US-Italy Tax Treaty does exempt any gambling winnings from taxation in the US, Butteroni still had to pay 47.90% of his one million dollars prize in Italy. This makes it the biggest tax percentage paid by any of the players at the final table this year.

Finally, we have Patrick Chan from New York. The American was the first to go from the final table and this means that he only won the $1,001,020 all the players got back in July. He will however not get to keep all of it of course since the tax bites add up to a total of 45.49% of the sum. These cover federal income tax, state income tax, New York City income tax and self-employment tax since he is registered as a professional poker player.

All things considered, the 2015 November Nine will have to pay a total of $10,080,122 in taxes, representing an average tax of 42.95%. As mentioned, the changes in the ranking safter the taxes are paid would put Nueville in fifth and move Stern and Cannuli down by one position each.

Looking at previous seasons of the WSOP and its taxes

Compared to last year, 2015 was a lot more profitable for the IRS. Out of the prize pool of $28,485,673 won by the final nine players in 2014, the IRS took a tax bite of $2,869,698. This is mostly because of where the players were from since the 2014 champion, Martin Jacobson, didn’t have to pay any taxes on the guaranteed prize of $10,000,000. Also, the other two players on the podium didn’t pay any taxes as well, since they were residents in London, UK.

The United Kingdom does not have any taxes on winnings originated from gambling and the US-UK Tax Treaty doesn’t impose any taxation systems on UK residents winning in the US either.

Although the three top players of the 2014 World Series of Poker Main Event did not all come from London, the fact that citizens of countries within the European Union can move freely to other countries in the area meant that the UK was the best location to be for winning from gambling.

Going back another year, we see that the numbers for the 2013 season are quite similar to the ones for this year. The IRS got more than $8.6 million out of the nine prizes awarded at the final table, which added up to almost $26 million.

This of course was one of the best years for the IRS in recent WSOP history but it could be worse for the winners. For example, in the 2008 Main Event, Peter Eastgate won $9 million and had to pay $6.6 million in taxes on it to the Danish government. This is because the taxes were calculated in two levels and while the 45% cut was applied on $520,000 of the winnings, the remaining sum had a tax bite of 75%. Eastgate did pay his taxes to the government but didn’t take long to resettle to London after that.

The best and worst countries to win at gambling

Yes, poker is not gambling and is considered mostly a game of skill. This puts in different sections when it comes to regulation but it is still a long way away from having its own global rules when it comes to taxation on the winnings. For now, poker winnings are mostly considered gambling winnings and fall in the same category with winnings from other casino games.

With that in mind, it is interesting to take a look at some of the regulations from around the world and the rules different countries have. While some will let the winners get all the money and don’t even consider them income which can be subjected to taxes, other countries will take a big chunk out of the amounts. More than that, in countries which gambling is illegal, it is possible for the government to take the entire winnings.

Some of the biggest gambling markets in the world are the UK, Germany and Canada. These also don’t treat gambling as a legitimate way to earn income annually and so the winnings obtained from casino games, poker or other similar activities at regulated operators are not taxed. The other side of the story is that losses on gambling games are not deductible, thus making it more difficult for players to make a living out of being professional gamblers.

In the United States, things get a lot more complicated. While the regulations treat gambling as a way to earn legitimate income, there are different strings attached. Losses are not all deductible but only up to the size of winnings reported in the same period by the gambler. For example, a player who wins $10,000 and loses $15,000 can only deduct $10,000 and thus take home $20,000 minus taxes. The rule was made to help prevent gamblers from betting big amounts just to have the losses covered by the government.

When it comes to online gambling in the US, it is illegal in most states apart for New Jersey, Nevada and Delaware as of now. This means that the Department of Justice can seize funds from players who gamble on unregulated websites across the country and statements show that it confiscated a total of $34 million from over 27,000 accounts for online poker in the US in 2009.

We also mentioned earlier that players who reside in other countries and win from legal gambling activities in the US can leave the country without paying anything to the IRS. These include most of the countries in the European Union, Japan, Turkey, Russia, South Africa, Ukraine and Tunisia.

As far as the worst countries to gamble, these are the ones where gambling is illegal and the governments take action to impose this prohibition. Notable examples are India and China. Any winnings obtained from gambling in these countries are considered illegal and will be confiscated if found out. Raids in India seize all the cash they find, no matter whose winnings they are.

Furthermore, some countries can also sentence those found gambling illegally. Players can get up to 3 years in prison in China while the Turkish government can issue fines of $55,000 for gambling on the internet.

Although the World Series of Poker promotes huge tournaments with the promise of big prizes, the subject of taxation is never brought up in the ads and many people are not aware of just how much of the winnings are paid in taxes. It is always something to consider for those involved in the gambling industry since it can have a significant impact on the overall bottom line.