WSOP Main Event: The Taxman Wins Over $6million!3 years ago
“In this world nothing can be said to be certain, except death and taxes”.
So said Benjamin Franklin, and although I’m sure he didn’t have poker in mind, this week’s winner of the Main Event Scott Blumstein – and many of his colleagues at the final table – have been stung by the US taxman to the tune of $6,390,860!
That’s $2million and change more than Blumstein will receive after the IRS have their cut, with Russ Fox, E.A., of Clayton Financial and Tax of Las Vegas, Nevada who writes a yearly WSOP report for Taxabletalk.com, stating:
"While taxes may be the price of civilization, the price in the United States is high."
Russ’s breakdown of the final table tax hits is eye-watering, and it won’t be the tears of joy we saw from the big winners at the weekend – unless they happen to be from the UK, or living there.
Scott Blumstein, the Morristown, New Jersey man who bested a field of over 7,200 players to scooped the life-changing Main Event title, the diamond-encrusted winner’s bracelet and $8,150,00 will probably be stunned to learn that only $4,310,571 will be coming his way – and that’s if he had no backers for his Vegas run.
As Russ explains, ‘A professional gambler, he’ll lose 47.11% of his winnings to federal and New Jersey tax ($3,839,429). Even though he had the largest winnings, he does not face the top tax burden among the nine (his is the second highest).’
Pennsylvanian Dan Ott, who put up a spirited fight in his heads-up battle with Blumstein, is also going to be hit hard by the IRS, Russ stating that although Ott’s state tax burden is the lowest among Americans (a flat 3.07%)’…’as a professional gambler he must also pay Altoona’s Earned Income Tax of 1.60%. Overall, Mr. Ott will pay an estimated $2,099,806 in tax (44.68%) to obtain after-tax winnings of $2,600,194. Indeed, Mr. Ott almost falls to fourth place based on after-tax results.’
With two Frenchmen making the final table, 3rd-placed Benjamin Pollak and 5th -placed Antoine Saout, you might think that the roughly 48% French tax level for big earners would have them reeling in shock as well, but therein lies the reason for them living and sharing a flat in London, England – there is no taxation of gambling earnings!
Pollak will keep his $3.5million, Saout his $2million and equally happy will be the Englishmen from the final table themselves – John Hesp (4th for $2.6million) and Jack Sinclair (8th for $1.2million).
Who does that leave for the taxman to take a bite out of? Argentinian Damian Salas would be fine if the WSOP was held in his homeland, where gambling earnings are not taxed either, but unlike the UK there is no tax treaty between the US and Argentina – Salas $1,425,000 cut to under $1million as 30% goes to the US government.
Russ Fox details the massive hit 6th place finisher Bryan Piccioli will take:
“Bryan Piccioli of San Diego… won $1,675,000 before taxes. Mr. Piccioli is a professional poker player and faces the highest percentage tax burden among the final nine: an estimated $489,328 to federal tax and $201,695 to California income tax (a total tax burden of $791,023, or 47.23%).”
Painful to say the least!
And what of the 9th spot man, Ben Lamb?
According to Russ, the Vegas-pro ‘loses an estimated $408,483 (40.85%) to federal income tax.’ He points out though, that, ‘as a resident of the Silver State Mr. Lamb doesn’t have to worry about state income tax on his winnings.’
The full scale of the IRS hit can be viewed on Taxabletalk.com here with Russ’s excellent in-depth analysis and views.
|Before Tax||After Tax|
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