I encourage all serious Canadian poker players to watch carefully as the federal government releases its budget this afternoon. I close friend in the Finance Department has revealed to me that the government has been considering major changes to how poker winnings will be taxed in Canada.

As has been discussed many times, gambling winnings are not currently taxable in Canada unless the player has a "reasonable expectation of profit." In other words professional poker players are expected to pay taxes on their winnings. Surely there are many who do not. And of course there are all sorts of opinions as to what a "reasonable expectation of profit" really means. The rules pre-date the poker boom that only really got going in Canada in the middle of the last decade.

The probable changes appear intended to clear up the confusion and ambiguity of the current rules and make the taxes easier to collect. Among the changes the government is apparently considering:

- Games of chance and games of skill to receive separate legal status under the tax codes. Winnings from games of chance (e.g. lotteries, slots, roulette, et cetera) to remain tax free while profits from games of skill (e.g. poker) to be taxable (probably beyond a modest threshold).

- Casinos in Canada to be required to implement measures to separate the finances of games of chance from games of skill on the same premesis. For example, casinos will probably be required to issue separate chips for poker and prevent them from being playable in roulette, or vice versa.

- Casinos to be required to identify all poker players and to issue receipts for poker buy-ins and to withold taxes for cash-outs beyond a certain threshold larger than a buy-in.

The changes will legally apply both to B&M and online. You can bet your life savings that all ten of our cash-strapped provinces will be diving head-first into the online poker business if these changes make it into today's budget.

Rupert

noone's gonna pay lol, and it would take a while for all the casinos to implement that stuff

OP plz update as the news breaks

Of course I will post once I see the budget in detail to see if anything is in there.

And yes if the gov't plans to involve casinos then I would be surprised if changes were made prior to 2012 to give casinos time to prepare.

The most profitable Canadian poker player I personally know does pay taxes.

That sounds like the kind of thing that might shut down smaller poker rooms in larger casinos.
Also, i worry that state sponsored online poker will be badly run, high rake, and result in blocking of international sites to eliminate the competition.

Maybe this'll be the impetus I need to move to the carribean.

Finally some clarification.

I hope it isn't the same as income tax where it is 52-54% in highest tax bracket.

Would like to move back to Canada.

For those interested, you may want to check out:

http://www.cbc.ca/news/pointofview/2...live-code.html at 3:30pm ET

Not gonna happen...

keep us updated with the changes

thanks for posting this, may be more appropriate in "Internet Poker" or "Poker Legislation" forums. Just please update if possible.

any word on whether it will be retroactive? sick beat if it is imo.

i dont believe this is going to happen...

I think they will just clarify, on what a pro, is and isnt.

If u have other income coming in, liek a real job, your certainly not paying.

If u win. 1mill in a poker tourny, and your not working your paying. Kinda thing

Atleast thats what i hope happens.....

If this changes, its a joke. And im out of here

What is going to happen if this is implemented is Casinos will put off changing chips in a poker room for as long as they can. If this happens at my local casino it will suck, because it will stop all the roulette junkies from coming in after a big losing sesh and try to make it seem like they're some poker god.

Casinos will keep the chips the same as long as they can and then poker players will be urged to go play one hand of BJ after a sesh to turn their cash into chance winnings.

online is where the money is. forget b&m for a moment

Yes create receipts for every deposit onto a site.....

forget deposits. its the withdrawls. are u kidding me right now

has poker already been declared a game of skill in canada?

i hope this isn't happening. if it is, i hope somebody makes the case that if poker winnings should be taxed, then poker losses should be considered write offs (just like any other sort of investing).

"has poker already been declared a game of skill in canada?"

By whom?

anytime you use a regular activity as a source of income it should be classified as a taxable benefit. The Canadian gambling exemption has always been for non-professionals. A similar action would be someone who sells their personal stuff once is considered a non taxable event, but if you sell personal stuff on an ongoing basis to support yourself, it is income and should be taxed.

If the government classifies Poker as a Game of Skill, woul'nt a ton of new Poker rooms start to open? Since it was previously illegal due to the "Game of Chance" classification". I would think the loss of income in that respect would make this plan very difficult to implement properly.

imo.

Posting to subscribe to this thread.

If someone would post results of this tonight, in case I miss it, it would be mucho appreicated.

very interesting point. it wouldn't be any different than running a for-profit locale for chess games, for example.

This is not right as a matter of Canadian income tax law.

A "taxable benefit" is income from office and employment under para. 6(1)(a) of the Act. It has nothing to do with "regular activity as a source of income". This is confusing business with employment.

As for the other example, personal use property is deemed to have an adjusted cost base and proceeds of disposition equal to the greater of the acutal amount and $1k. This saves small ticket personal items from income tax. The ebay example that you indirectly refer to confuses capital gains with inventory.