IRS Wins Big Thanks to WSOP Main Event Finalists

July 24th, 2017 | by Jason Reynolds

The World Series of Poker (WSOP) Main Event is over and the final prizes are set, but not everyone at the final table will take home their advertised payout.

WSOP Main Event winner Scott Blumenstein might have won more than $8 million, but he could lose almost 40 percent of that to the tax man. (Image: WSOP)

When the final chips had fallen in the 2017 WSOP Main Event, New Jersey’s Scott Blumstein took home the most valuable poker title of them all as well as $8,150,000 in prize money.

However, thanks to US tax laws, the American pro will see around $4,000,000 taken by the tax man.

Tax Man to Take a Cut

Although there a various ways to offset tax burdens with gambling losses and other schemes, Blumenstein is likely to hand over 36.72 percent in federal taxes (effective rate). On top of this, he’ll have to pay the Federal Insurance Contributions Act (FICA) payment of 2.42 percent (effective tax rate) to cover Social Security and Medicare.

Finally, being a resident of New Jersey, Blumenstein will also have to cover an effective state tax rate of 8.78 percent. When you calculate his potential liability based on these figures, Blumenstein will take home $4,244,409 for winning the 2017 WSOP Main Event.

In contrast, British players John Hesp and Jack Sinclair won’t have to hand over a penny of their winnings. Under UK law, gambling winnings are exempt from taxation and, because poker is classed as gambling, players get to keep 100% of their prize money. Moreover, thanks to a tax treaty between the UK and the US, neither player is liable for any federal non-resident taxes.

Two of the shrewdest players at the final table were French pros Antoine Saout and Benjamin Pollak. Despite being born in France, the two pros are now residents in London and are, therefore, except from French tax which would have been around 48 percent of their winnings.

Taxation Winners and Losers

With this being the case, four players at the WSOP Main Event final table won’t have to hand over any of their prize money. However, thanks to Blumenstein and fellow American’s Daniel Ott, Bryan Piccioli and Ben Lamb, the IRS will receive somewhere in the region of $7,500,000

As for Argentina’s Damian Salas, his seventh place finish was good enough to earn him $1,425,000 when the Main Event was over.

However, even though gambling winnings aren’t taxed in Argentina, his homeland doesn’t have a tax treaty with the US. This means he’s liable for a 30 percent deduction in non-resident taxation.

While it’s unlikely the players who made it to this year’s WSOP final table will be complaining, it’s clear that is pays to be a non-US resident when it comes to poker prizes.