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differences that would warrant different tax treatment under the
current Internal Revenue Code.
A. Tournament Poker as a Sporting Event
Petitioners argue that tournament poker is conducted in much
the same way as other professional sporting tournaments.
Participants pay an entry fee and compete to win prizes through
their good fortune and superior skill. But simply because a
sport or activity is played or conducted in a tournament setting
does not transform the underlying activity into something
different.9
Tournament poker play, much like live-action poker,
necessitates the use of the word “bet” or “wager” even to
describe how the game is played. Petitioners argue that the
usage of the word “bet” in this context is insignificant. The
Court sees it differently.
Betting is so intrinsic to poker that it is nearly
impossible to avoid using a word that implies gambling in any way
8(...continued)
each player receives the same fixed amount of chips. The game is
played, and when a player runs out of chips, the player is out of
the tournament. The playing continues until one player has all
of the chips. It may take a different skill set to play
tournament poker because no endless stream of funds is available,
and endurance is a crucial factor to a participant’s success.
9 Similarly, a casino’s decision to issue a Form W2-G,
Certain Gambling Winnings, or a Form 1099-Misc., Miscellaneous
Income, does not affect the nature of the winnings for tax
purposes.
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