Italian Poker Players Win EU Ruling on Taxing Winnings

October 24th, 2014 | by Brian Corlisse
Pier Paolo Fabretti Italian taxes online poker

Poker players in Italy like PokerStars pro Pier Paolo Fabretti (seated)  may now find that they don’t have to pay tax on their tournament winnings in the EU, following a recent court ruling. (Image: Neil Stoddart/PokerStars)

Two Italian poker players can breathe a little easier today, now that Italy’s poker tax laws have been clarified by the European Union Court of Justice (CJEU). While Italy’s poker laws have always been a thorny issue for local players, the recent CJEU ruling makes things a little clearer for Italian poker aficionados.

Following a legal challenge by PokerStars pro Pier Paolo Fabretti and fellow grinder Cristiano Blanco, Italian tournament players should now be able to earn tax-free cash while playing tournaments within the EU.

Italy’s Poker Tax Laws

Until now, citizen poker players had been subject to a tax levy on all tournament earnings outside of Italy. In contrast, any cash won during a tournament inside one of Italy’s nationally licensed casinos is exempt from taxation.

The problem with this dual tax regime came to the fore after Fabretti was slapped with a bill for the €52,000 ($65,800) he won during the €10,500 ($13,287) High Roller at IPT Perla in Slovenia. Frustrated with the hypocritical nature of the law, Fabretti, along with Blanco who’d received similar tax bills, took the case to Europe’s highest court.

Arguing that the law restricts free trade movements and places an unfair bias on nationally regulated tournaments (of which the Italian government already takes a significant piece), the players’ legal representative brought the case to the CJEU.

Positive Outcome

After considering the facts and reviewing EU trade laws, the Court of Justice eventually returned a verdict in favor of the players. Confirming that Italian tax laws could deter grinders from travelling to another EU country to play poker tournaments, the court ruled that neither player should be forced to pay tax on their tournament winnings inside the EU.

“Articles 52 and 56 TFEU must be interpreted as precluding legislation of a Member State, which imposes a charge to income tax from gambling winnings made from casinos located in other Member States, and instead exemptions from ‘income tax above similar where they come from casinos located in the national territory of that State,'” read the ruling by the CJEU.

In response to the decision, representatives for the Italian government argued that the provisions were put in place to protect players. By not taxing revenue gleaned from national casinos, the government’s lawyers argued that it motivated players to play at AAMS-controlled properties which were essentially “safer” than non-government controlled establishments. AAMS stands for L’Amministrazione autonoma dei monopoli di Stato, which is the official Italian online gaming commission.

Aside from giving Fabretti and Blanco full access to their winnings, the decision is a clear sign that the EU isn’t prepared to side with governments that treat poker players and operators unfairly. Moreover, the ruling has sent a message to governments across Europe that online poker and gaming isn’t an industry that the EU is willing to overlook.


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