Sunday, August 24, 2008

Taxation Madness, Part II

When I wrote about my decision to play at Betway, I gave taxation as one of the basic problems with playing at the large sites like Stars or FTP. The thing is, these sites are not based in Europe and therefore I have to pay taxes on my winnings if I play there. If I play on a site based in the EU, however, that's not the case. Now, on the surface, I'm dodging a 30% extra "rake" by playing in the EU. But it's not quite that simple.

I'm sure you've all seen Swedish guys playing at Stars. Wanna know something about 'em? They're tax evaders. No, really, they are. Yes, I'm sure. Yes, that sure.

Because there's no way they'd be playing there if they were following the letter of the law, and I know this because I very recently was informed what the letter of the law actually means. As I explained in the post I link at the top, the way Swedish tax law for poker is written (presuming it takes place outside of the EU) is that I'm taxed on my winnings but cannot deduct my losses. And it's on a per-pot basis. So if I win $10 in one hand, I get to keep $7. If I lose $10 the next hand, tough break. 50k hands of $3/$6 6-max limit hold 'em works out to owing the government about $70,000 - (almost) regardless of net result.

So when you see someone from Sweden playing $3/$6 at Poker Stars - a site based in Costa Rica, i.e. "not EU" - then you can consider it a safe bet that he isn't being entirely honest when he fills out his tax declaration.

The way this law works is pretty sickening. See, I can accept the idea of paying taxes on net poker winnings outside of the EU. It would still make a whole ton of sense for any professional Swedish poker player to stick with the European sites (Ladbrokes, Party, etc.) since the extra 30% off the winnings that he or she would have to pay for winning money at another site is difficult to offset with game selection, although I suppose plausible at the highest tiers. But as it stands now, it's not financially viable to play on a non-EU site. The term I used in my email to Skatteverket was "financial suicide," in fact, and the lady who replied didn't disagree with it.

But now that I've gotten the confirmation from Skatteverket, it's time for me to move this fight to the politicians. I'm not entirely sure how to best go about it yet. I've contacted them about this law before but without result. This time, I'll have to try a new angle. Maybe I can get Poker Stars to help me apply some pressure? This really is in their best interest as well.

I'll have to think about that.

Lori lets me know that it's dinner time, and it's smells deeeee-lish-us! Of course, that might not be dinner, that might be the blueberry cup cakes she baked. Either way, I'm in for a treat. Jealous? You should be.