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when discussing the topic. Bets are placed on each hand, and
each round of betting has consequences. Whether or not the chips
being used to make these bets have immediate and tangible
monetary value does not change the fact that the players are
still placing bets, hoping to win. This is true even in a
tournament setting.
Petitioners agree that the first poker tournaments held
were, in fact, “wagering events”. For example, in those early
games, “Each participant put up $10,000 and received $10,000 in
chips.” The fact that the chips being used to place bets in
tournament poker today only bear some fractional relationship to
the dollar values of the prizes and/or entry fees does not change
the basic nature of the game as a wagering activity.
B. Professional Tournament Poker as a Business
Petitioners also raise an equal protection argument and
argue that there is no valid reason to treat tournament poker
differently, for tax purposes, from tournament golf or tennis.
Petitioners argue that the benefits of being able to offset
“exaggerated income” from very successful years by losses
sustained in less successful years should be available to
professional tournament poker players as much as they are to
other professions.
Congress made a policy decision to treat businesses based on
wagering activities differently. In the absence of Congressional
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Last modified: May 25, 2011