WSOP and Taxes: 2018 Update

The 2018 World Series of Poker (WSOP) begins today here in Las Vegas. There are also several other tournament series that have either begun or will soon begin at the Venetian, Wynn/Encore, Aria, Planet Hollywood, Binion’s, Golden Nugget, and Orleans hotels. Very little has changed from 2017, but I am updating the post I did last year with some new information.

The WSOP has made one change that could impact some Americans: If you use a passport for identification, you must bring a second piece of identification (such as a state ID card). From the WSOP FAQs:

What Photo ID’s are acceptable?
The following forms of ID are acceptable:
US Passport [and Passport Card] (A second form, an unexpired governmental ID verifying physical address such as a valid Driver’s License will also be required with this first form of ID).

(A driver’s license or state ID by itself is sufficient.)

Good luck to those participating in this year’s WSOP! And now on to the meat of the post:

The tax environment has changed, so I’ve decided to do a thorough update of the tax situation for those attending the WSOP (and other summer poker tournament series here in Las Vegas). I’ll cover the basics of the tax situation, backing, foreign (non-US) backing, and non-American winners and what they will face with taxes. This post will be somewhat long, so I’m going to break this into sections that you can click on to open. The focus is on tournaments where tax paperwork is issued.

The Tax Basics

Backing by Americans of Americans

Backing: Non-Americans

Non-Americans and ITINs

[Note 1]: I recently became aware of a lawsuit in the Midwest where Caesars’ policy is being challenged. The lawsuit is scheduled for trial in late January 2018.

[Note 2]: It is likely the IRS would reject a Form 1040NR filed by Jon noting his extra withholding. The IRS won’t understand the issue given that there is no tax treaty issue (say, Jon is from Australia) and say, “Take it up with Caesars.” It’s a classic Catch-22.

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4 Responses to “WSOP and Taxes: 2018 Update”

  1. Franco Iannamico says:

    Hi. Im living in argentina and i have mi italian passport. If i win more than 5 k i must pay tax?

    • Russ says:

      Generally, the WSOP looks at residence for withholding. I believe you have to submit proof of that residence when you cash (e.g. a utility bill). The US-Italy tax treaty exempts gambling winnings from withholding; however, the US and Argentina do not have a tax treaty that covers gambling. You can check with the WSOP on whether or not you will have withholding.

      • Bert says:

        Hi Russ,

        I’m a dual citizen of Australia & the USA.

        I am a resident of Australia.

        We do not have a tax treaty as I understand it.

        When I sign up for tournaments, must I participate as an Australian for purposes of tax-withholding? You mentioned residency as the determining factor. Is this true even if I’m a US citizen? Thanks very much.

        • Russ says:

          A US citizen owes US taxes on their worldwide income, so you should be able to signup as a US citizen. If you provide your US passport, I would think the WSOP will tax you on cashing as a US citizen. That said, I would ask @WSOP on twitter (that particular Twitter account has been responsive to questions like this) on anything specific you would need.

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