How much money did the November Nine really win?
Last week, the 2013 World Series of Poker Main Event came to a close as professional poker player Ryan Riess defeated Las Vegas VIP host and amateur poker player Jay Farber heads up. Riess claimed the over $8.3 million first place prize and the platinum and diamond bracelet, estimated at around half a million dollars. While the whole world was watching the action, the American Internal Revenue Service was the one group that could rest assured that they will get their cut from the huge prizes up for grabs, regardless who would win them.
An $8,359,531 payday is certainly life-changing but only a part of it will actually end up in Riess’ account. Tax attorney Russ Fox quickly pointed out the fact that the prize is pre-tax and that around 40% of it will be taken by the government. Since he resides in Nevada, there will be no state income tax to worry about but Riess will have to pay a Federal income tax and a Federal self-employment tax. An early estimate puts the total amount of taxes at an amazing $3,478,818, or 42% of the winnings, which will have to be paid to the IRS.
Jay Farber is not a pro player so will have to pay a smaller percentage of his $5,174,357 second place prize. However, the 39% still means that he will have to give back $2,026,527 of the payday he got on Tuesday last week and he also has to give $10,000 back to the backers which paid for his entry in the Main Event.
Bracelet winner Amir Lehavot was eliminated from the final table in third place and took home a nice $3,727,823 prize for his amazing run. Since he is a resident of Florida and married, the pro player will not have to pay a state tax on his winnings. However, he will have to fork over $1,549,200 to the government.
[geocode id=1]Sylvain Loosli, who finished fourth, is arguably the biggest winner of the November Nine if we look at it from a tax perspective. Although he was born in France, he relocated to London to pursue his poker career. The United Kingdom doesn’t have a tax on gambling winnings and this includes pro gamblers. Compared to the 49% tax in France, the 0 in the UK sounds very good for Loosli, who will get to enjoy all of his $2,792,533 winnings, putting him ahead of Lehavot.
Chip leader at the start of the 2013 WSOP Main Event Final Table JC Tran didn’t manage to use his experience and stack to his advantage and was eventually eliminated in fifth place, winning $2,106,893. Being a professional poker player residing in California means that Tran will have to pay the highest tax for an American at the table – a whopping 47.56%. This means an estimated $1,001,977 in taxes.
Canadian Marc-Etienee McLaughlin is in an even worse spot than Tran as Quebec has a very high marginal tax rate of 50%. Based on his $1,601,024, prize, he will have to pay $792,935 in taxes.
Michiel Brummelhuis will benefit from the US-Netherlands treaty that saves him from any taxes on his winnings. However, he will have to pay the gambling tax of 29%, which will be $355,353.
David Benefield and Mark Newhouse will pay taxes of 46% and 44% on their respective winnings.
In total the taxes took in by the American IRS add up to $8,626,311 ($9,642,011 for all countries combined), making the taxman the biggest winner of the 2013 WSOP Main Event.
The final hand of the 2013 World Series of Poker Main Event:
http://www.youtube.com/watch?v=N9fo75KlP3w