The name “Isildur” may mean nothing to you. Perhaps you remember Isildur as a character in J.R.R. Tolkien’s classic The Lord of the Rings. For those who follow online poker, the name Isildur means screenname Isildur1.
Isildur1 played high-stakes poker online, and I mean really, really, high stakes. He won and lost millions of dollars. At the poker tournament I recently attended in the Bahamas, the man behind Isildur1 was revealed: Viktor Blom, a 20-year old poker professional from Sweden.
Mr. Blom signed a contract with PokerStars, the world’s largest online poker site. Mr. Blom has also apparently moved to the United Kingdom, a player (and tax friendly) environment for a poker player. However, his prior online poker play was on PokerStars’ rival, Full Tilt Poker, while he lived in Sweden.
In the story in Sweden’s The Local, Mr. Blom states that he turned $2,000 into $2,000,000 in just three weeks. He played high-stakes matches with well known professional players, winning and losing millions of dollars. And therein lies the problem.
Under Swedish law, you can play online poker on the Swedish site Svenska Spel or on sites in the European Union and not owe income tax. However, if you play on a site outside of the E.U., you owe tax based on every winning hand of poker. And the location of Full Tilt might (or might not) be within the E.U.
Consider a typical session of poker. You might win a hand for $5, fold the next hand, lose a hand for $5, etc. In an hour you might have won and lost $100 and be even overall. Mr. Blom played several screens (hands) at the same time, at very high stakes, so when he won and lost millions his total winnings might have been in the hundreds of millions of dollars…and that’s what Swedish tax agency Skatteverket may want to tax him on.
According to PokerNewsDaily, “Dag Hardyson from the Swedish Tax Authority told Dagens Industri that he believed Full Tilt Poker was considered to be outside of the European Union; therefore, Blom would have to pay taxes on his gambling.” And the amount of the tax due? Just $149 million. As to Mr. Blom’s career winnings from poker, let’s just say that they are less than 1% of that amount.
Erik Boman, a spokesman for Skatteverket, told the Swedish newspaper Dagens Nyheter, “Internet poker is something we’re looking into and I know this poker player, but I can’t comment on whether we’ve opened a case.”
So if you’re an aspiring poker player from Sweden, I’d check with Skatteverket to see if the online poker site you’re playing on is tax-free. If it isn’t, London has never looked so good.
Tags: ViktorBlom