Are poker winnings taxable?

A tax case in 1925 established that winnings from gambling are not taxable. However, a recent court case challenged that.

The case was about paying forcing a father (Mr Hakki), who calls himself a professional Poker player, (and has no other source of income) to pay child maintenance.

The court agreed that they should follow the tax treatment. If his activities where regarded as “earnings” and liable to tax then he would be required to pay child maintenance.

The case was interesting because:

• Mr Hakki had appeared on television where he won a prize
• He appeared in poker magazines
• He plays 3-4 days a week and travels to play
• His target earnings are £200 a day
• He reviews poker strategies on his Website

The court found that he exercises his skill, judgement and experience and believe his activities where different to people who place a simple bet. And, they thought it was like a job, more than a hobby and also different to a compulsive gambler.

As a tax specialist I would not have been surprised if the court decided that his winnings were taxable. However, they didn’t because they did not feel the activity had enough “organisation”.

This is different to a case in 1968 where a club owner had to pay tax on card winnings as they were treated as part of his overall profits. This is different again to a case in 1937 where a golf professional, who took bets on games and made money in addition to his teaching fees. This was held not to be taxable.

These cases show how thin the line is between tax winning and losing a tax case.  If you have any tax enquiries we can help.