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Old 02-04-2008, 03:45 PM   #326
prayformojo
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Triple B View Post
Fair enough, but if it was not relevant I doubt this Canadian judge would quote it. I'm not a lawyer but there must be a reason that this case is included in the judgement.
Hrm, well I am a lawyer (who now plays full time and reports for taxes), and I wouldn't rely on this case if it saved me $20 million. I'm not going to go into details why, but here are a few general ideas.

1) Judges love to make broad general statements and analogies when writing decisions.

2) Judges love to comment on situations outside of the purview of the facts in front of them.

3) Judges love to make what look like statements of law, based on no facts at all (e.g. discussing card playing as something akin to a "trade" without having any evidence of the nature of professional card playing), when those broad statements don't actually affect the decision before them and are therefore not going to be appealed.

4) When a judge does any or all of 1) through 3), subsequent judges, who do actually have material facts before them and are deciding the specific point of law to which the previous judge made general reference, LOVE to find ways to distinguish that past judgment. We have a system of common (judge-made) law based on precedents, but that system thrives on review, re-assessment, and disagreement among courts. No court is going to take these comments at face value as applicable to poker. If any court did, and I were the CRA lawyer, I'd have my appeal factum mapped out in my head before I got home.
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Old 02-04-2008, 03:58 PM   #327
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Re: Canadian Online Poker Tax Thread

Another option for those that are trying to get a mortgage:

I found someone who was foreclosing on his mortgage and I was able to "assume" a 500k mortgage without any kind of approval process. I'm not how often these kinds of situations occur but it worked out awesome for me.
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Old 02-04-2008, 08:15 PM   #328
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Re: Canadian Online Poker Tax Thread

Credit issues are not unque to poker players - even "legitimate" self employed people have tons of issues getting approved for things.

To answer some questions,
The best case scenario for tax is getting it down to about 25% tax, and you'd be paying both portions of the CPP, some added accounting and legal costs.

The court case doesn't really set any precedent and if the CRA followed different arguements then the rulings may be different.
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Old 02-09-2008, 10:07 PM   #329
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Re: Canadian Online Poker Tax Thread

A little off topic, but I think this thread has some knowledgable canadians:

Iwant to attend the 6 weeks of WSOP, but as a canadian, I will be subject to a 30% withholding tax on all my tourny winnings. I've been reading up a lot on this, but I still have a few questions.

1. Getting an ITIN.
I can avoid the withholding tax if I get an ITIN (tax number). Anyone know if I can get this ITIN? I know the IRS changed the requirements for receiving an ITIN this year. Any Canadian received their 2008 ITIN yet? What documentation did you send in with your W-7 form? From what I read on the IRS website, I need to send in my W-7 Form "using the services of an appropriate gaming official serving as an IRS
ITIN Acceptance Agent"... I don't even know what that is. Or can I still get an ITIN through the casino when I arrive in vegas for the WSOP, as others have done in previous years?

2. Paying tax if I get an ITIN
Just because I don't get my tax withheld by the casino, doesn't mean I still don't have to pay tax. And it appears the tax I have to pay will still be near 30%. You can only deduct your gambling losses. So if I spend $30k on WSOP tournies and cash for $500k, then I still have to pay almost 30% tax: ($470k*30%) $141k. Can I just stiff the IRS as it'll be on me to claim these winnings? Would that get me in trouble even though I don't live in the US?

I play poker for a living and I would love to go to attend the 6 weeks of WSOP every year, but if I have to lose 30% of my winnings then I don't know if it is even worth it (even with the weak field).
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Old 02-25-2008, 04:49 PM   #330
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Re: Canadian Online Poker Tax Thread

Hi everyone,

I am new on this forum. For quite some time I have been wondering about online poker and taxes. I have seen that TorontoCFE has been a great help for many here and I was hoping if you could answer a few questions? Thank you very much in advance.

I am in a bit of a special situation here. I am a part-time student at the University of Ottawa and I have been regularly winning at poker since mid-2005. More precisely I have made $52,000 (US) since. I have regularly deposited amounts of up to $3,000 at a time in my bank account. So far, CRA hasn't knocked on my door. Up until one month ago, I always had real job though. Now I intend to pursue my studies part-time but with no real job, only poker. My questions are:

1) Is it safe for me not to declare my online poker income as long as I am a student? I expect to make $30-$40K this year from part-time online poker.

2) If not, would having a part-time job camouflage the fact that my main income is from playing online poker? In other words, would it keep me out of trouble as long as I am a student?

I am really set on saving as much money as possible so that in 2010, after I graduate, I can feel comfortable playing the hours, the stakes, and the number of tables at once necessary to become a Supernova Elite on Pokerstars, which alone in bonuses is worth over $100K. At that point I would definitely declare my income.

Thank you for answering those two questions!
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Old 03-01-2008, 08:27 AM   #331
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Re: Canadian Online Poker Tax Thread

I have a few questions to TorontoCFE and others who may know the answers. I am a citizen of Russia and am currently in the process of obtaining my Canadian permanent resident visa. Right now all of my income comes from playing poker, mostly online (about 100K a year), and I am planning to continue playing after I move to Canada. My questions are:

1) Will I be able to incorporate if I am a permanent resident of Canada, not a citizen?
2) How long will it take to establish a corporation? How should I go about it? Is it safe to use incorporation services advertised online?
3) I would like to travel to the U.S. for live poker tournaments, and as a Russian citizen I will need to obtain a visa. I heard that in this situation they usually tend to give visas only to people who are employed in Canada. In your opinion, would incorporating solve this problem?
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Old 03-01-2008, 02:24 PM   #332
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Re: Canadian Online Poker Tax Thread

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Originally Posted by helen_gamble View Post
I have a few questions to TorontoCFE and others who may know the answers. I am a citizen of Russia and am currently in the process of obtaining my Canadian permanent resident visa. Right now all of my income comes from playing poker, mostly online (about 100K a year), and I am planning to continue playing after I move to Canada. My questions are:

1) Will I be able to incorporate if I am a permanent resident of Canada, not a citizen?
2) How long will it take to establish a corporation? How should I go about it? Is it safe to use incorporation services advertised online?
3) I would like to travel to the U.S. for live poker tournaments, and as a Russian citizen I will need to obtain a visa. I heard that in this situation they usually tend to give visas only to people who are employed in Canada. In your opinion, would incorporating solve this problem?

I thought there was a 5 year income tax exemption for new Canadian residents, although maybe it only applies to new Canadian citizens. I forget what the exact law is but there's something like that, probably worth looking into.
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Old 03-06-2008, 02:10 AM   #333
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Re: Canadian Online Poker Tax Thread

Just when I start to feel like paying taxes is a good move I see an article like this:

http://www.canada.com/vancouversun/n...391dc8af9e&p=1


If guys like this arn't paying taxes....

EDIT: Accidentally linked to page 2

"Gambling winnings -- Wilson prefers not to call it income -- are not taxable in Canada. In the U.S., major wins are taxable and losses can be written off against those winnings.

Like the legality of online poker itself, taxes are a grey area.

Canadian law has traditionally held that gains from gambling are incidental to the "entertainment" of gambling even when earnings from gambling form the majority of one's income, according to University of Toronto law professor Ben Alarie and lawyer Alex Ingelman."

Last edited by PatInTheHat; 03-06-2008 at 02:28 AM.
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Old 03-06-2008, 02:21 AM   #334
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Re: Canadian Online Poker Tax Thread

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Originally Posted by PatInTheHat View Post
Just when I start to fee like paying taxes is a good move I see an article like this:

http://www.canada.com/vancouversun/n...391dc8af9e&p=1


If guys like this arn't paying taxes....

EDIT: Accidentally linked to page 2

"Gambling winnings -- Wilson prefers not to call it income -- are not taxable in Canada. In the U.S., major wins are taxable and losses can be written off against those winnings.

Like the legality of online poker itself, taxes are a grey area.

Canadian law has traditionally held that gains from gambling are incidental to the "entertainment" of gambling even when earnings from gambling form the majority of one's income, according to University of Toronto law professor Ben Alarie and lawyer Alex Ingelman."

Holy crap. I would never put myself out there in a public way like that. Talk about asking for trouble. Thanks for the link.
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Old 03-06-2008, 02:28 AM   #335
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Re: Canadian Online Poker Tax Thread

Yeah no kidding. Obviously a ****** move on his part but it's pretty damn interesting for everyone else
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Old 03-06-2008, 02:58 AM   #336
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Re: Canadian Online Poker Tax Thread

Yeah I was paying for my gas leaving when I saw that on the front page of the news. Bought it and then as soon as I read about him not claiming income tax I shook my head and thought wtf are you thinking even if it is a grey area actually being in the newspaper saying that. Hopefully nothing comes of it but I would be interested if I see his face again in the paper if the CRA comes after him. Hopefully not.

I also actually remember an interview with a pro poker player at the River Rock on the news and she said she has been doing it for years and never had to pay taxes or filed them. Haven't heard anything since about her either. Although with poker becoming so big lately I wouldn't doubt if the gov't makes a ruling on gambling income as they are missing out on so much of it now.
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Old 03-06-2008, 05:34 AM   #337
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Re: Canadian Online Poker Tax Thread

wat if u are a winning player for like say 10 years and then suddenly run cold as hell for 2 years...would the losses then be claimed against the previous winnings?

i dun think the tax system could be fair for poker

side note: i have a buddy who use to play at the rock consistently couple years ago who played with the kid from the Sun article. he says that he was pretty much a losing player but had heard that he had turned it all around in the last few years. cool to see the article in the sun.
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Old 03-07-2008, 02:03 AM   #338
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Re: Canadian Online Poker Tax Thread

bump
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Old 03-07-2008, 04:40 AM   #339
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Re: Canadian Online Poker Tax Thread

Yeah I live in BC too, like 20 mins away from where the guy in the vancouver sun lives. I think its a pretty bad move in exposing himself and the poker community to the public concerning the fact that poker players dont pay taxes, but also could end up generating a lot more interest in online poker for us.
My plan regarding taxes tho is to just watch the news every so often until we see an article about him having to actually PAY his taxes, then I will start to worry about paying.
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Old 03-07-2008, 05:13 AM   #340
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by pual View Post
If you're making 100k/yr+ why don't you just save for 3 years and buy the damn house in cash?
There are several reasons this wouldn't be a great idea. The least of which is the fact 300k can't really buy you a house in most major Canadian cities anymore. Aside from that it's a poor use for your money because hypothetically speaking if you're going to end up sinking anything near a half million dollars into a residence you're going to be better off getting a mortgage and investing a large % of that money elsewhere.

If you were good enough at investing/managing money you'd be able to offset the interest rate of the mortgage pretty easily seeing as they're like ~6-8% depending where you go and for how long.
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Old 03-07-2008, 07:09 AM   #341
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Bigfoot View Post
There are several reasons this wouldn't be a great idea. The least of which is the fact 300k can't really buy you a house in most major Canadian cities anymore. Aside from that it's a poor use for your money because hypothetically speaking if you're going to end up sinking anything near a half million dollars into a residence you're going to be better off getting a mortgage and investing a large % of that money elsewhere.

If you were good enough at investing/managing money you'd be able to offset the interest rate of the mortgage pretty easily seeing as they're like ~6-8% depending where you go and for how long.
No. In the United States this would be true but mortgage interest is not deductible in Canada. You'd be better off paying for the home in cash and then borrowing money to invest. The interest from funds borrowed to invest would be deductible.
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Old 03-07-2008, 06:18 PM   #342
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Re: Canadian Online Poker Tax Thread

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Originally Posted by PatInTheHat View Post
Just when I start to feel like paying taxes is a good move I see an article like this:

http://www.canada.com/vancouversun/n...391dc8af9e&p=1


If guys like this arn't paying taxes....

EDIT: Accidentally linked to page 2

"Gambling winnings -- Wilson prefers not to call it income -- are not taxable in Canada. In the U.S., major wins are taxable and losses can be written off against those winnings.

Like the legality of online poker itself, taxes are a grey area.

Canadian law has traditionally held that gains from gambling are incidental to the "entertainment" of gambling even when earnings from gambling form the majority of one's income, according to University of Toronto law professor Ben Alarie and lawyer Alex Ingelman."

Thanks for posting the article. Very interesting indeed.

So as I see it, he has at least a 1.5 Million dollar home with a 270K bankroll that he admits and also has some daily swings of 100K. All this with the approval of lawyers and law professors with regards to not paying taxes. Sounds good to me.

I'm definately saving this article and if there's any trouble from the CCRA in the future, take this out and bitchslap them across the face with it.
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Old 03-08-2008, 10:31 AM   #343
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Re: Canadian Online Poker Tax Thread

This means he is paying taxes on it though, right:


`Cognizant of the kind of grief governments can cause for people with unusual and unregulated sources of income, Wilson is legitimizing his gains.`
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Old 03-08-2008, 11:03 AM   #344
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Re: Canadian Online Poker Tax Thread

That was reffering to him using his winnings to open that restaraunt not him paying taxes on his poker income.
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Old 03-09-2008, 09:14 PM   #345
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Re: Canadian Online Poker Tax Thread

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Originally Posted by 4thstreetpete View Post
Thanks for posting the article. Very interesting indeed.

So as I see it, he has at least a 1.5 Million dollar home with a 270K bankroll that he admits and also has some daily swings of 100K. All this with the approval of lawyers and law professors with regards to not paying taxes. Sounds good to me.

I'm definately saving this article and if there's any trouble from the CCRA in the future, take this out and bitchslap them across the face with it.

Now read the paper : Bet on It written by the proffessor and lawyer (which was mentioned in the column)

They go on to say that casual gmabling is not taxed but if it's your sole souce of income it's considered taxable. here's a quote from the Bet on it article:

"B. GAMBLING AND INCOME TAXATION IN CANADA
Traditionally, there has been a distinction made in Anglo-Canadian income tax
jurisprudence between gambling gains associated with casual wagering, and gambling gains that arise from an organized activity undertaken with a view to a profit. Gains arising from the former have typically not been subjected to income tax, on the basis that a casual gambler’s motivation was primarily one of entertainment and, hence, that casual gambling gains were not income “from a source.” Gains arising from organized gambling activities, on the other hand, have been made subject to income tax on the basis
that the gains arise from the business of gambling and therefore constitute business income."

To me that reads If you play for a living you have to pay taxes, The article is 19 pages long and an intersting read, somewhat dry for some.
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Old 03-09-2008, 09:39 PM   #346
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Re: Canadian Online Poker Tax Thread

I've been trying to read that article as well but having trouble setting up an account and I can't seem to download anonymously.

It's just frustrating hearing about so many guys making 10x+ more then me and not paying tax. If the goverment isn't even bothering to go after these guys it really makes me think im better off not paying.
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Old 03-09-2008, 10:00 PM   #347
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Re: Canadian Online Poker Tax Thread

I'm sure this is just re-hashing old discusion but...

Quote:
Originally Posted by NL__Fool View Post
Gains arising from the former have typically not been subjected to income tax, on the basis that a casual gambler’s motivation was primarily one of entertainment and, hence, that casual gambling gains were not income “from a source.”
How can you prove my motivation? If I say I am motivated by entertainment how can you possibly prove otherwise?

Quote:
Originally Posted by NL__Fool View Post
Gains arising from organized gambling activities, on the other hand, have been made subject to income tax on the basis
that the gains arise from the business of gambling and therefore constitute business income."
What defines organized? This is such a fine line that again I don't see how this could ever be proven....


Here's the article for those who want it:
http://papers.ssrn.com/sol3/papers.c...act_id=1025588
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Old 03-10-2008, 02:57 AM   #348
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Re: Canadian Online Poker Tax Thread

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Originally Posted by NL__Fool View Post
Now read the paper : Bet on It written by the proffessor and lawyer (which was mentioned in the column)

They go on to say that casual gmabling is not taxed but if it's your sole souce of income it's considered taxable. here's a quote from the Bet on it article:

"B. GAMBLING AND INCOME TAXATION IN CANADA
Traditionally, there has been a distinction made in Anglo-Canadian income tax
jurisprudence between gambling gains associated with casual wagering, and gambling gains that arise from an organized activity undertaken with a view to a profit. Gains arising from the former have typically not been subjected to income tax, on the basis that a casual gambler’s motivation was primarily one of entertainment and, hence, that casual gambling gains were not income “from a source.” Gains arising from organized gambling activities, on the other hand, have been made subject to income tax on the basis
that the gains arise from the business of gambling and therefore constitute business income."

To me that reads If you play for a living you have to pay taxes, The article is 19 pages long and an intersting read, somewhat dry for some.
After this paragraph, it goes on to cite a court case where a guy's income was made up mostly from card playing and horse betting. The case was about how his gambling activities "were so extensively organized and occupied so much of his time and attention that, had they continued throughout the years in question, any net gain therefrom might possibly have been income from a business". He ended up not having to pay income tax. Then it writes this:

"it has been generally accepted in Canadian income tax jurisprudence that gambling gains will not constitute income from a source if the gains result from casual betting that is more akin to a hobby than to a business. It will only be cases in which a taxpayer is conducting a business of gambling by, for example, acting as a bookmaker, that the gains will be susceptible to income tax."

We aren't casually betting, nor anything like a bookmaker, so take from that what you will.

Last edited by rocket21; 03-10-2008 at 03:24 AM.
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Old 03-10-2008, 03:08 AM   #349
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Re: Canadian Online Poker Tax Thread

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Originally Posted by rocket21 View Post
Isn't "organized gambling activities" something like running a casino business??
It has been established that running a casino or bookmaking business is "organized gambling activities". To the best of my knowledge, it has never been established in a court that playing poker as your only source of income constitutes "organized gambling activities" or running a business.
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Old 03-10-2008, 08:36 AM   #350
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Re: Canadian Online Poker Tax Thread

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Originally Posted by rocket21 View Post
After this paragraph, it goes on to cite a court case where a guy's income was made up mostly from card playing and horse betting. The case was about how his gambling activities "were so extensively organized and occupied so much of his time and attention that, had they continued throughout the years in question, any net gain therefrom might possibly have been income from a business". He ended up not having to pay income tax.

The paragraph does not say he made most of his money from card playing and horse betting, it says he earned "substantial amounts" from those activities, I have no idea what amount constitutes as substantial, but I would consider something as low as 30K to be substantial. The same paragrah goes on to say that he was a hotel proprietor during the time he was playing cards and horse betting so it's a lot easier to prove that playing cards and horse betting were a hobby when during that time he owned a hotel and derived income from that.

Here is the paragraph Rocket 21 is refering to:

"The most important Canadian case to hold explicitly that casual gambling gains are not taxable is Morden,30 a 1962 decision of the Exchequer Court. Morden was a hotelproprietor in Sarnia who had earned substantial amounts from playing cards and betting on horse races and sporting events in the tax years from 1949 to 1953. The Minister had reassessed Morden, arguing that he should have included in his taxable income his wagering winnings from those taxation years. Cameron J. stated that Morden’s gambling
activities up until 1948 “were so extensively organized and occupied so much of his time and attention that, had they continued throughout the years in question, any net gain therefrom might possibly have been income from a business.”31 Nevertheless, making reference to a number of the relevant English authorities,32 Cameron J. held that for “all the taxation years in question, his gambling activities were only occasional and amounted
to nothing more than indulging in a hobby or recreation, and that therefore his net income therefrom was not taxable.”33 Cameron J. stated in closing that “[w]hile his bets were high at times and his gains substantial, I can find no evidence that his operations amounted to a calling or the carrying on of a business. Gambling was in his blood and it provided him with the excitement which he craved. It was his hobby.”34 Following Morden, it has been generally accepted in Canadian income tax jurisprudence that gambling gains will not constitute income from a source if the gains result from casual betting that is more akin to a hobby than to a business. It will only be
cases in which a taxpayer is conducting a business of gambling by, for example, acting as a bookmaker, that the gains will be susceptible to income tax."

Poker players are nothing like bookmakers however the bookmaker was just an example of running a business.
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