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Tax Attack

by Lucy Rokach |  Published: Dec 01, 2006

I didn't go to the World Series of Poker this year due to family engagements - yes, there is life beyond the annual pilgrimage to poker paradise - but one or two of my colleagues who did go, returned whingeing and whining. There was not a good word about how well Harrah's coped with the increase in players or how they remedied last year's glitches. No, they were incandescent about being dragged out of tournaments and asked to pay the taxes that they allegedly owed, there and then.

Up until this year, European players simply produced their passports when collecting their winnings and then assumed all would be OK. In fact, it was OK. The last time I was at the World Series and cashed out, I just presented my passport and was given my prize money. No problem. But apparently there is a serious problem. Once upon a time, when numbers were manageable and fewer Europeans attended the World Series, Jack McClelland (the esteemed former WSOP tournament director) used to sort out all Europeans seamlessly. In fact, I don't think any of us knew we had to have an Individual Taxpayer Identification Number (ITIN), as we just flashed our ID, signed an official-looking tax form (probably Form W-7), and walked off with the chips. Effortless. And so it was with the first two years of Harrah's ownership of the World Series. Ugh - well, not quite. Somewhere along the line, the Internal Revenue Service must have informed Harrah's that all players whose country has a reciprocal tax treaty must produce an ITIN to be able to collect all of their winnings. No number, and you get your prize money minus 30 percent.

Americans are used to regularly parting with this amount of their winnings, but not us Brits; we live in a poker tax-free heaven. Now, tax evasion is a very serious crime in any country, and Harrah's (a huge, billion-dollar corporation) has no intention of falling afoul of the IRS over a few Europeans who can't be bothered to sort out the relevant documentation before they get to the U.S. When Jack did it a few years back, it might have been for a handful of Europeans every year, but we can hardly expect Harrah's to baby-sit thousands. It's not their responsibility, although I'm sure that if they wanted to, they could.

Now, we Brits could say that their method of collecting this missing 30 percent is a bit gung ho, but hey, this is the Wild West! You could reasonably ask why they didn't approach players upon registration; after all, it must be on their computer. And surely it makes sense to demand this money upon players' arrival (when they still have money in their pockets), so I puzzled long and hard over their preferred policy. If you ask players to cough up tax money upon arrival, most will simply reply not too politely and refuse to register. If, on the other hand, you wait till they've accumulated a few chips in a tournament, you have them by the short and curlies. Either they pay up immediately or they're withdrawn from the competition, with their entry fee refunded, and are barred from further tournament participation.

I think it's a stroke of genius, personally. So, you might upset a few tender punters who object to being blackmailed in public; who cares? Harrah's has corporate responsibility to follow the law, and that must take precedence over a few disgruntled players. In any case, it's not as if they're losing this 30 percent; it's only on loan to the U.S. government until the players claim for its return once they have all the proper documentation. Of course, that might take a while, but what government anywhere can be found guilty of promptly returning monies that don't belong to it?

The bottom line is that we are all big girls and boys who are capable of looking after ourselves. That's not to say that a friendly warning on the WSOP website months before the event wouldn't have gone amiss. Then, at least Harrah's could have claimed the high moral ground, "Well, we warned you, didn't we?'' In any case, before I travel there next year, I shall be contacting Harrah's to see if they think I also owe the U.S. Treasury money, and will try to get that sorted before I leave these shores. Having some official haul me out of a tournament demanding immediate payment of thousands of dollars is not my idea of a warm welcome. So, now you've all been warned, get your ITIN and tax situation sorted before you go, or you might be sent steaming once in Vegas. spade