The real winner of the WSOP

Found this article in Bluff Magazine. If it is true then it is pretty crazy. Kind of makes beating 6800+ people and waiting 4 months alot less rewarding.

Any thoughts??

The Real Winners at the World Series of Poker


This year's World Series of Poker concluded early this morning at the Rio Hotel and Casino in Las Vegas. The winner of the main event won $9,152,416 but would he actually end up with all that money?


This year's winner was Peter Eastgate from Denmark. The United States and Denmark have a tax treaty. Because of the treaty Mr. Eastgate doesn't owe a penny to the IRS. That just leaves the Danish tax authorities.



Denmark's tax agency is called SKAT. Denmark, like the United States, does tax gambling winnings. For casino gambling (which is where I believe this will be classified) the tax rate is 45% on the first 4 million Danish Kroners; it's 75% on income above that. Today $1 is worth 5.88907 DKK; Mr. Eastgate won 53,899,250.70 DKK before taxes. Mr. Eastgate will owe about 39,224,438 DKK in tax ($6,660,545). Put another way Mr. Eastgate will keep 14,674,813 DKK ($2,491,871) of his winnings—just 27.23% of his prize. Yes, he faces an effective tax rate of 72.77%. Ouch.



Ivan Demidov of Moscow, Russia finished second and won $5,809,595. The United States and Russia also have a tax treaty and Mr. Demidov won't have any of his winnings withheld by the IRS. Russia has a 13% flat tax rate, so Mr. Demidov will owe about $755,247 to the State Taxation Service of Russia.



Third place went to an American, Dennis Phillips of Cottage Hills, Illinois. Mr. Phillips won $4,517,773 for his efforts. He's an amateur gambler so he won't owe self employment tax on his winnings. Still, he can expect to pay $1,568,950 to the IRS and $135,533 to the Illinois Department of Revenue.
Ylon Schwartz of Brooklyn, New York, finished in fourth place for $3,774,974. He is a professional gambler so he'll owe self-employment tax on his winnings. He'll also owe state and New York City income tax. His likely tax bite is $1,396,304 to the IRS and $387,966 to the New York Department of Tax & Finance.



Two Canadians finished in fifth and sixth place. Scott Montgomery of Perth, Ontario finished in fifth place for $3,096,768. The US-Canada tax treaty specifies that 30% of his win will be withheld to the IRS. Thus, $929,030 was withheld. Mr. Montgomery is a professional gambler so he will owe tax on his win to Revenue Canada. However, he will be able to take a credit on his Canadian tax return for the money withheld to the IRS. As Canada's tax rate is 29% he likely won't have to pay any additional funds to Revenue Canada. However, when provincial taxes are included the tax rate becomes 46.41%. Thus, Mr. Montgomery will owe tax in Canada: about $491,728 after the credit for the tax withheld to the IRS. [My thanks to the commenter who pointed out the impact of provincial taxes.


The sixth place finisher was Darus Suharto of Toronto. Mr. Suharto is an accountant, so he won't owe tax to Revenue Canada on his won. However, of the $2,418,562 he won, $725,569 was withheld per the US-Canada tax treaty. He may be able to claim a credit on his Canadian tax return for years to come based on this withheld money and eventually get it back.



The Franchise Tax Board (FTB) was rooting for David Rheem or Kelly Kim to finish in first place. These two Californians finished in seventh and eighth place, earning $1,772,650 and $1,288,217 respectively. Mr. Rheem will owe about $651,262 to the IRS and $170,302 to the FTB; Mr. Kim will owe about $470,995 to the IRS and $121,074 to the FTB.



Craig Marquis of Arlington, Texas finished in ninth place. He is also a professional gambler, and of the $900,670 he won he'll have to fork over about $328,911 to the IRS.





Here's a table summarizing the tax bite:



Amount won at Final Table $32,731,625



Tax to SKAT (Denmark) $6,660,545



US Tax Withheld to IRS $1,654,599



Add'l Tax Owed to IRS $4,416,422



Total Tax to IRS $6,071,021



Tax to State Taxation Service (Russia) $755,247



Tax to Revenue Canada $491,728



Tax to NY Dept of Tax and NYC $387,966


Tax to California FTB $291,376



Tax to Illinois Dept of Revenue $135,533


Total Taxes $14,793,416

That's a total tax bite of 45.20%.

No tax on poker winnings in the UK.

yea but who got the bracelet

Not all that relevant here as none of the final table hail from the UK. although I did read somewhere that Eastgate did move to the UK before the final table played out so as to somehow minimize the tax impact. Not sure if it made a difference.

plus endorsements

i bet eastgate gets no endorsements

free tournies from PS maybe

i hope he has to pay 2x tournament fees for every lolament he enters from now on, as an extra tax for winning the main event and having no personality

They'll be able to offset their WSOP gains against all their online losses, so it's not so bad!

Wow, can you imagine having to forgo 73% of your winnings???

I wonder if the winner from Denmark can somehow avoid paying these taxes by changing his citizenship?

I don't know about you, but were this me, I would be hiring some of the best Intl. accountants and looking to do anything possible to maximize my take home earnings.

Sweden is really close to Denmark, but then from us should become even worst.
I don't like this at all

lol, russian jealousyaments

Those numbers are crazy!!!!! I would agree with some in that, yes, he did win the bracelet, and yes many of them will get endorsements...but I doubt the endorsements will come in large numbers.......

In short, when you take the monetary reward away from poker, there really is not much left!!!

-EV to be Danish ..

wow!! I figured there were taxes on all the winnings but never realized how it all layed out!!! sheesh! Denmark! wow!


no taxes on gambeling winnings in the UK eh?! makes you wonder if 4 million would be enough $$ to make someone defect hahaha

Haha this very funny.

And what if they are winning online players. I heard that Eastgate was playing at the $50/$100 limit HU online fairly successfully.

It will matter to me if I win it!

Absolutely. Very relevant. And very funny.

Nice to see you haven't lost your cutting wit...

wow.... that is unreal... shitty deal for eastgate... another way of looking at the wsop.. playing for your respective tax bureaus... ouch thats harsh

Didnt eastgate become a UK citizen or move there or something? So he wouldnt pay any tax whatsoever, so these tax numbers are very flawed. It would be like 8 million goes to taxes, which isnt THAT bad.

In strict dollar terms maybe. Living in Denmark means it's offset by a few things: free college education and health care are among them. Is that worth $7M to him? No, probably not.

But at least he shouldn't be tempted to blow what's left on a fancy car - they charge a massive amount of tax on cars there as well.

Last I read was that Eastgate tried to get UK citizenship during the four-month final table delay, but he wasn't successful.