Poker Player Jailed for 14 months in $1million Tax Evasion Case

09:42
06 May

A Connecticut businessman and part-time poker pro and sportsbettor has been jailed for 14 months for evading taxes on more than $1million of poker gambling winnings.

Sixty-three-year-old Guy Smith of Shelton, Connecticut was sentenced last week after striking a deal with prosecutors, the business owner having to repay at least $820,000 in owed tax as well as serving more than a year in jail.

In December 2020, Smith ‘waived his right to be indicted and pleaded guilty today to one count of tax evasion’, and was facing a much lengthier sentence for his deliberate tax evasion.

Smith, who owns and operates Centerline Interiors LLC, a business that specializes in commercial interior construction, was repeatedly warned by the IRS (Internal Revenue Service) that he had to declare his poker earnings, but refused to do so.

---

A press release from the DoJ’s U.S. Attorney’s Office for the District of Connecticut stated:

“For the 2012 through 2016 tax years, Smith furnished his tax preparer with a summary of Centerline’s income and expenses, which the tax preparer used to prepare Smith’s federal income tax returns. Smith did not provide his tax preparer with any bank statements. During these five years, Smith intentionally failed to report to his tax preparer, and to the IRS, approximately $1.1 million in income he received from Centerline Interiors."

Smith’s poker and gambling winnings were also raised.

“In addition, even though the IRS notified Smith on multiple occasions that he was required to report all of his gambling income on his federal tax returns, Smith concealed his gambling income from his tax preparer and paid no income taxes on more than $1 million in gambling winnings."

---

With seven 5-figure poker scores to his name, Smith has $236,580 in recorded tournament winnings to his name, his best score a $51,149 scoop at the 2016 Summer Kick-Off event at the PPC Poker Tour in Mashantucket.

According to the DoJ release:

“Smith withdrew funds from both his business and personal bank accounts for his gambling business.”

Reports of a pre-sentencing memo for Smith state he, “regularly engaged in gambling activities including playing in poker tournaments at local and out-of-state casinos.”

The memo adds:

“Smith used cash for his gambling business by, in part, withdrawing funds from his Centerline business and his personal bank accounts. Occasionally, Smith did well in the various poker games and poker tournaments and made money doing so. Defendant Smith also engaged in illegal sports betting.”

Despite being repeatedly warned that he had to declare his poker and gambling winnings, the memo states that Smith, “engaged in an affirmative act of evasion by wilfully concealing from and not informing his tax return preparer regarding his gambling income or about the existence of his PayPal account into which his winnings were deposited.”

---

Smith’s 14-month sentence, followed by two years’ supervised release, was less than prosecutors had wanted in the case. In his defence, Smith put forward the argument that he was unable to offset losses against his poker and sportsbetting earnings.

That argument was given short shrift:

“The Government understands the argument that as a gambler Smith should be allowed to net his winnings against his losses as a matter of course, however that is not the law. Moreover, the fact that ...Smith also engaged in illegal sports betting and broke an additional law that is not accounted for in his criminal history nor as part of other relevant conduct, should not now be a benefit.”

Smith will now have to pay $821,415 in federal income taxes, as well as all outstanding taxes, interest and penalties, and must report to prison in late June to serve his sentence.

---

There have been plenty of previous tax avoidance cases involving poker players, with Spanish-based poker pro Dragan Kostic jailed for 18-months for not reporting his huge €532,000 ($766,438) 2011 EPT Barcelona runner-up cash.

The arcane Spanish tax laws have seen many players hit with double-taxation demands, with Canadian and German pros also facing huge problems.

• Want poker news as it breaks? Join the Poker News and Gossip Telegram channel!